10 Steps Women Should Take Negotiating Salary Compensation

10 Steps Women Should Take Negotiating Salary Compensation

” No Wonder women don’t negotiate as often as men. It’s like trying to cross a minefield backward in high heels.”


Sheryl Sandberg, “Lean In: Women, Work, and the Will To Lead”

The gender gap remains in the usual places for women–less pay, work fewer years in the workplace with time out for children and other dependents, lower savings for retirement–but women are gaining ground.

More women are graduating college and hold more graduate degrees than men. They are  reaching higher corporate levels and there are more women-owned or founded businesses. Women are primary breadwinners in 40% of US households according to a 2017 Chase study in partnership with Refinery29. Of these women, 37% outearn their partners and 63% are single moms.

Women Need To Be Assertive But Find It Hard To Negotiate

When it comes to women achieving success in their careers, moving from entry levels to ever-higher corporate levels, they need to understand how to better negotiate compensation packages. Women tend to be less assertive and more accommodative than men. That may leave significant money on the table, starting with their first job’s salary.

When women get a lower salary than men for the same job and experience, that difference should not be dismissed as for just one year. It becomes cumulative. She starts with a lower base. Even if she and her male counterpart get the identical raises and promotions over the same years worked, the impact of compounding interest leaves a sizable gap in her comparable net worth.

Women Pay A Greater Social Cost

Studies have pointed to the “social cost of negotiating” which results in negative impacts on those who are self-advocating for a salary raise. It was found however that the impact was significantly worse for women than men.

“Aggressive and hard-charging women violate unwritten rules about acceptable social conduct. Men are continually applauded for being ambitious and powerful and successful, but women who display these same traits often pay a social penalty. Female accomplishments come at a cost.”    Sheryl Sandberg, Lean In: Women, Work, and the Will To Lead

Research shows women make better advocates when they represent others than for themselves. Women fear backlash when it is for themselves but are viewed better when they negotiate for others.

10 Steps Women Should Take When Negotiating


1. When You Are Limited To What Is Offered

Before you go gangbusters, know that certain jobs may not be negotiable. Entry level jobs may be less negotiable especially when  you have little to no experience in the field.

Typically, teaching, union, hourly positions, government and civil jobs are based on stated pay scales. Some companies have moved to more transparent structured compensation schemes.

2. Do Your Research First

Be aware of what the typical salary ranges are for jobs you are seeking in your field and your geographic area. It may be difficult for you to try to negotiate when its your first job however you can inquire what the high and low salaries reflect.

Glassdoor, Payscale and Salary.com are good places to start to find average salaries. This may provide you information for your first job offer and be a source as your role expands at the firm. This can provide you with relevant documentation when you seek a raise.

Speak to people who you know are working in jobs that you are interested in. Ask about the drivers of success and challenges, and companies that may have opportunities. Linkedin is a great professional networking website source to use. Job boards and, when you begin the interviewing process, human resources representatives can be helpful.

You should learn what the industry norms are for your field and how it relates to your education and experience.

Always be prepared to reflect on successes thus far, especially when asking for raises and promotions.

3. Build your Negotiation Skills

It is not unusual to be uncomfortable to ask for higher pay, bonuses, benefits, or promotions. Take a class to develop your negotiating skills,  or find a good negotiation coach.

I strongly recommend articles and  YouTubes by Stanford Graduate School of Business Professor Margaret Neale. Her videos are directed at strengthening skills for women. She is a negotiation expert and author of “Getting (More of) What You Want.”

Lifelong Skills

These skills are core in many aspects of your career and in life overall. They will help build your confidence the right way, prepare thoroughly on the key issues, and listening to the other side’s perspective.

Don’t be afraid to practice by doing a video of yourself. Listen to your voice and tone, watch your demeanor, and body language. Ask someone to critique you. Stay positive, sit straight and sound confident.

Practice for real by calling your cable company and ask for a reduced bill, negotiate your interest rate on your credit card, ask for a reduced price for a used or new car for example. Make sure you are armed with information

4. Getting A  Job

If you have completed the interview process for a job you desire, show your enthusiasm but don’t discuss salary. Wait until after the position has firmly been offered to discuss salary. Don’t be the first to provide a definitive dollar amount or a range you are looking for.  By doing your research ahead of time (see below) you should have some idea of what the range is.

If offered a job but not yet the salary terms, ask for the range. Don’t accept on the spot. Be thoughtful, understand the package, and be ready to negotiate. Your goal is to exceed the high end of the range because you are their best candidate.

A  recent Glassdoor survey found that women negotiated less than men, accepting the salary offer 68% as compared to 52% for men.

5. Take Time To Mull Offer And Show You Are Serious

If you are unsure of the offer, ask for time to contemplate it. Even if you are silently filled with joy, ask the hiring manager for time. They will appreciate your seriousness. If you do want to accept offer, give it orally and follow up immediately in writing. Ask for a letter confirming your acceptance and agreed-upon salary, your title, incentives, and benefits

If there is a gap between the figure you had in mind and their offer, you may want open to the door to negotiate. You can say you are excited about the offer and the organization. Ask if there is any leeway in the compensation. You want to be truly motivated, particularly if you are confident in your skills and experience.

Consider Trade-Offs

If the salary gap is too large, it may be too hard to overcome unless other parts of the package, like a bonus or stock options can bridge the salary difference. See below for a discussion on your compensation package. This will have to be negotiated between you and the employer. Make sure that this is possible ahead of time by speaking to HR.

Some companies have extra money set aside with expectations that prospective employees may ask for better compensation packages but a lower percentage of women negotiate than men.

By the way, if you are asked about salary history, change the topic to the position. In Massachusetts, it is illegal to ask for that confidential information on an interview since 2016.

Related Post: Challenges Women Entrepreneurs Face And Overcome

6. Keep Track of Your Accomplishments

As you move up the corporate ladder, keep a personal journal of what you have done, not hours worked. You need to build your list of selling points with real achievements like successful presentations,  landing a lucrative contract, strong customer sales or satisfaction, or training new employees. It will strengthen your conversations when you pitch for more money and benefits.

Women often undervalue their own worth and as a result, have lower expectations for themselves. Confidence-building is just as important as your hard work, diligence, and skills. It took time for me to strengthen my self-assurance to take stands when necessary and to be able to convince others.

7. Solicit Manager Support

It is always a good idea to have management in your corner who can provide you support and feedback. They can provide you with advice on how to advance in your career or get desirable assignments. Take the initiative to talk to your managers about how things are going. Look for mentors. Ask your supervisor for suggestions on professional development or online course opportunities.

Ask your boss for constructive criticism over coffee or lunch. Be professional, loyal and supportive.

I was fortunate to have had good support from my research director. He was often a good sounding board, providing advice and valuable feedback in a complex environment, particularly for women. He treated people professionally and equally.

8. Getting A Raise

You always want to be paid what you are worth whether you are changing jobs or moving up the ladder. If you remain in your organization, you have a record of accomplishments, your ability to work with or manage others and a reputation. You can use internal and external sources to find out what people are making in the field.

When I was an equity analyst at a major investment bank, I was happy with my package and not looking to leave. I ignored recruiter calls. That was a mistake. When I finally decided to talk to a recruiter, I found out I that I had been underpaid (despite making big bucks!) relative to my male counterparts.

It is always good to listen to what you may be worth externally. Of course, there are “switching costs,” that is adjusting to different firm, management, and colleagues, having to maintain or rebuild your reputation for a new audience, different demands and culture.

9. Know Your Worth

Often, talking to outsiders validate that you are in the right place. Nevertheless, use the information like higher salaries or compensation packages to get what you want and need. Arrange to meet with your boss and speak honestly. Provide your accomplishments, share your continued enthusiasm to work with the firm, and specifically her/him and team.

Ask for the money you believe you deserve. If you cannot get to the exact dollar, consider your package and what upgrades you may want. As you move up in your firm to more senior positions, and there are specific times to discuss your annual package, is not unusual to have an attorney with employment law expertise to assist you in negotiations.

Related Post: Ten Ways For Women To Achieve Their Financial Independence

10. Compensation, Incentives And Benefits

Your salary is not the only part of compensation package to consider.  Other incentives, benefits and perks can be a big part of your compensation package. Some companies have been quite progressive and innovative. Investigate what these companies offer.

Important features of a compensation package are:

Incentives such as bonuses and equity options. You want to know if there is a signing bonus, annual bonuses, and how do you may earn equity options. Sometimes your title and position will dictate increased access to sweeteners to your compensation package.

Learn about the company benefits such as Insurance (health, medical, disability, life, dental and vision); 401K retirement plans and if there is a employer-matching program, vacation time, graduate school tuition reimbursement, and other benefits.

Increasingly, other benefits and perks may provided by companies or you can negotiate for to be in your package:

professional development opportunities;

commuter offerings like access to a car on weekdays;

Gym pass or discounts;

Severage packages in the event your company is taken over and/or your job eliminated;

Extra vacation to match the 4-5 weeks you had at your previous employer; and

Work-life balance offerings like working from home, flexible hours, child care cost reimbursements, extended parental leave.

Perks for certain levels of attaining certain corporate levels

Related Post: A Guide For College Grads On Your Company Benefits Plan

As women progress in their careers, compensation packages may become more complex.  Attorneys may do your bidding for you in negotiations, however, you need to understand what you deserve. Women in general are not getting what they are worth. There are positive changes happening for women in the workplace and elsewhere.

How has your experience been in getting a new job, a salary raise, and better benefits? Please share your comments. We are happy to hear from you!











Yes, Money Can Buy Happiness

Yes, Money Can Buy Happiness

“Money is of no value; it cannot spend itself. All depends on the skill of the spender.”

Ralph Waldo Emerson


“Whoever said money can’t buy happiness didn’t know where to shop.”

Gertrude Stein


Money may buy happiness according to growing evidence done in recent years. These results say that it is up to you.

That is good news! I grew up on the notion that an excess of money may lead to feeling miserable. However, wealth alone is not a guarantee of a good life. It can help you with your goals, make relationships easier, and give you an opportunity to be happy.

5 Ways How Money Can Buy Happiness:


#1 A Certain Income Level May Do The Trick

A 2010 study by Princeton University researchers Angus Deaton and Daniel Kahneman found a $75,000 salary to be an optimum level for two types of happiness: day-to-day emotional mood and a deeper life satisfaction.

Their work was based on 450,000 Americans polled over two years by Gallup and Healthways. Respondents were questioned on their satisfaction, income, and adversities like lower income, divorce, and health issues. The more that income fell below the $75,000 benchmark, the unhappier people felt. However, those who made more than that amount did not report a greater amount of happiness.

Another study at Purdue University and the University of Virginia found $95,000 to be an ideal salary for life evaluation or satisfaction and $60,000-$75,000 associated with emotional well being. Their research was based on an audience of 1.7 million people in 164 countries in a Global Gallup Poll.

Income Levels By Standard Of Living

Income levels varied by each country’s standard of living. Northern America (Canada and the US) required a higher level of $105,000.

The Purdue study found that earnings above the ideal threshold tended to coincide with a lower level of happiness. This suggests the more you make, the more you tend to spend. As such, this results in higher costs that often accompany higher income leads to lifestyle inflation.

Andrew Jebb, the lead author of the study,  pointed to a degree of happiness through the fulfillment of both basic needs and increasing material needs. Evaluations tend to be more influenced by people comparing themselves to other people. This adds to the old adage “Keeping Up With The Jones’.”

related post: 9 Ways To Avoid Lifestyle Inflation With A Savings Plan

#2 You May Not Be Spending Your Money The Right Way

Consumers can realize more happiness if they spend their money according to core principles as recommended by psychologists Elizabeth Dunn, Daniel Gilbert, and Timothy D. Wilson. Their work was published in the Journal of Consumer Psychology.

Dunn and her colleagues have been proponents of the relationship between money and happiness so long as you adhere to the following eight tenets that I find particularly resonating for consumers:

Buy More Experiences

For some of us, spending money on a new dress, a purse, gadgets, or other material goods can make us feel good. The question is what produces longer lasting benefits: material or experiential purchases?

An experience can be a walk on the beach, an exotic or family vacation. True, not all experiences are good. The benefit of a great experience may allow for revisiting that happy memory. When my children were younger, we often picked pumpkins at a farm, had apple cider, and visited the animals that lived there. We all remember the fun we had. I’m pretty sure we bought our kids souvenir t-shirts, lanterns, and hats but don’t recall those items being used.

Giving to Others

Ever feel a high from helping someone in need? I have and I am sure I am not alone.

The smallest gesture can mean so much to another that we are sometimes embarrassed that we didn’t act sooner. Making donations to your favorite charities feels good. Slipping a small bill to someone on the street provides us with an even greater satisfaction because it is an intimate form of giving.

This is called “prosocial spending.”  There is a positive impact on our social relationships when we practice this type of giving. Giving a friend a book you enjoyed or a tasty treat improves our bond with that person.

Treat Yourself To Small Pleasures

When we make small purchases we are treating ourselves with relatively inexpensive pleasures. Happiness is closely associated with the frequency of these treats. As financial resources are relatively finite, we are better off making smaller purchases.

Hedonic Buys

Dunn and her colleagues point to the lesser likelihood of adapting to this lesser and more limited spending. On the other hand, we adapt more quickly to the more expensive purchases if habitual. These are referred to as “hedonic buys”  that are consumed for luxury purposes.

Let’s say you buy high-end specialty coffee drinks like cardamom lattes at $9 a pop on a daily basis from Starbuck’s Reserve Roastery. Over a short period, you may get accustomed to this rather expensive habit and it is no longer special.

When we buy showy sportscars or a bigger house, it may be consistent with our spending habits. We may not even enjoy these consistent expensive purchases as much because we are so used to these luxury goods.  This is classic lifestyle inflation, with more spending “required” to feed your happiness.

Related Post: 9 Ways To Avoid Lifestyle Inflation

Buy Less “Overpriced” Insurance

Extended warranties can be a waste of money for consumers. From appliances to electronics, extended warranties may cost up to 50% of the product cost. From the retailers’ point of view, the margins for this kind of insurance tend to be very high. This practice explains the heavy-handed sales pitches we receive at the counter. Extended warranties, often unnecessary, add juicy commissions to the sales ticket. Consumer Reports recommends that you should research the manufacturer’s initial warranty which often covers the product for at least 90 days.

Pay Now, Consume Later

In our credit card-oriented society, we are conditioned to spending consumption and pay our bills later. We get immediate gratification from our purchase which often doesn’t last as long as the bill on our card balances. Delaying gratification may sometimes allow us to feel the pleasure longer.

When booking a vacation, pay for it in advance, rather than purchase it on your credit card. Your enjoyment may last longer.

Think About What You’re Not Thinking About: Remember The Details

This is psychology at its best. We often focus on the best qualities of a purchase. By doing that, we minimize or ignore other features that may be critical. I know I have experienced this in some of our biggest purchases only to regret it later.

Let’s say you want to buy a vacation home. You may be drawn to a cottage for its location and its charm, ignoring some of its downsides. Having a limited budget for your second home, you need to understand potential costs. Buying this cottage may require a lot of updating inside and outside of the building. Had you considered those costs, it may have helped you to negotiate the price down.

Related Post: How To Overcome Biases In Financial Situations

Beware Of Comparison Shopping

Searching for a certain product that is available through different brands, we may use several websites like BizRate and Shopping.com that may help us compare them. Retailers know comparison shoppers are ideal audiences for promotions because they have high-intent to purchase.

The authors say these sites may offer comparisons based on available options rather than the attributes buyers are seeking. They may be purposely distracting you from what you really are specifically looking for.

Follow The Herd Instead Of Your Head

The authors say you should read reviews available and pick your movies, reading, and restaurants based on better customer ratings. By paying close attention to the happiness of others, you may better glean what you prefer.

I have found some reviews can be helpful though artificial intelligence though at times they be faulty. Netflix recommends the next film we should watch. However, after I watched a murder mystery, Netflix recommended I watch Chitty Chitty Bang Bang. Hmmm.

#3  Buy What Fits Your Personality

A Cambridge University study in 2016 looked at how spending increased happiness when the purchases were for goods and services that matched the consumers’ personalities.

This ambitious research by psychologists Sandra Matz, Joe Gladstone, and David Stillwell reviewed 76,000 UK-based bank transaction records of customer purchases of 112 categories. Their study focused on Big Five personality traits: Openness to Experience, Conscientiousness, Extraversion, Agreeableness, and Neuroticism.

The study proved that money can buy happiness if spent according to the right psychological fit. Our personalities influence our spending for experiential purchases, material goods or to buy for others.

This is similar to how we choose people to spend time with. We often pick our friends or close colleagues because our psychological fit matches with theirs. We are also happy to spend money individually according to our psychological makeup.

#4 Trade-Offs Between Time And Money

The relationship between time and money is well established. An old proverb “time is money” equates the two variables. However, we put different values on time and money. Time is a limited resource. Whether it refers to 24 hours per day or a lifetime, time is finite and money is less so.

Saving money versus saving time was the theme of the Harvard Business School 2017 study by Ashley V. Whillans. Rising incomes around the globe have often been met with stresses of time. More than 6,200 adults were surveyed in the US, Canada, Denmark, and The Netherlands.

Buying Some Time

This study set out to examine how to reduce stressful feelings of time scarcity. The growth of the sharing economy has made time-saving services for household chores increasingly available Those surveyed allocated discretionary income at $80-$99 per month to buy time-saving services such as meal delivery, house-cleaning, and lawn services.

Their study found people realized greater life satisfaction when linked to spending money for these time-savers by reducing their stress.

Marital Bliss

In a 2018 Harvard Business School study led by Whillans, over 4,000 cohabitating adults (ie. committed adults) extended the above research. Disagreements about household chores are a primary source of relationship conflict. 30% of the respondents cited disagreements over household chores as the number one reason for divorce.

Here, it was found that time saving purchases promoted relationship satisfaction, based on bought “marital bliss.”

There is a Chinese proverb:

“If you want happiness for an hour, take a nap. If you want happiness for a day, go fishing. If you want happiness, get married. If you want happiness for a year, inherit a fortune. If you want happiness for a lifetime, help somebody.”

#5 I would note a few other ways that  money can make us happy for a lifetime:

  • Spend less than you make.
  • Don’t spend to impress others.
  • Create an emergency fund for times of unforeseen circumstances.
  • Minimize debt by paying your credit card balances in full or reduce spending.
  • Save diligently and deploy into retirement and investment accounts.
  • Invest early with diversification minimizes risk and long term strategies.

Related Posts:

Why You Need An Emergency Fund (And How To Invest It)

10 Ways To Better Manage Your Spending

10 Tips To Diversify Your Portfolio

Thank you for reading!

What makes you happy? How does money affect your satisfaction levels? Do you use time-saving services to smooth stress levels?













15 Ways To Save Money In The Summer

15 Ways To Save Money In The Summer

“Summertime and the livin’s easy.” George Gershwin (Porgy and Bess), sung by Ella Fitzgerald

Summer is here!

It is a good time to spend more time outdoors.

Don’t miss a good opportunity to save money this season while spending time with your family. I spend a lot of time in Litchfield County and the Berkshires, essentially our local environs in the summer and year-round. However, our recommendations came be found in many parts of the country.

When it comes to saving money, get your whole family involved. It is always a good time to speak to your children about family values, particularly budgets, wants versus needs, spending, and saving.

15 Ways To Save Money In the Summer:

#1 Eat more fruit and vegetables

It is always a good time to eat healthier with better choices at your local grocery. Better yet, go to the nearest farmers’ market. Fruits and vegetables are even more plentiful in the  warmer months. Go to a farmers’ markets near you. They come to the cities, or you can order from a cooperative. Healthiest picks at lower prices.

Connecticut has over 100 farmers’ markets seven days a week. We find them in virtually every town in the Northwest corner of the state.  There, you pick among locally produced seasonal fruits and vegetables from the region. Many carry breads, cheese, honey, syrup, flowers, herbs, sausage, jams and jelly, chocolates and mushrooms.

#2 Have A Picnic

Find  parks, waterfalls, hills and mountains. Bring a blanket, some wine, cheese and other delights. Find a picnic table. Enjoy the outdoor weather, scenery, and birds chirping. Go with your family and friends. Many state parks are free, have trails for hiking, fishing and sitting by waterfalls, like Kent Falls State Park. Save some money as you go to fewer restaurants in the summer.

#3 Garage/Yard Sales

Declutter your home and organize a sale with your family. Consider combining with homes in your neighborhood. I recommend having these events, starting on Friday, rather than Saturday and Sunday, typically the more crowded days. Avoid July 4th and Labor Day when people have more BBQ’s and families visiting.

Advertise with large signs so people riding by can see the dates and location at 30 miles an hour. While you can advertise in your local paper, there are a few social media sites try like yardsalesearch.com and garagesalehunter.com.

When holding your event, label prices clearly. Consider lowering prices late in the day to sell off what you have left. Experts have said these sales can net $500 and up if thought out properly. Aaron Lapedis is respected in this area and has written “The Garage Sale Millionaire.” 

#4 Outdoor (and Indoor) Entertainment

There are many cheap and free music festivals, film festivals, country fairs, theater, and wine tastings across the country. Two sources to find summer events in your area are Cheapism and Debt.com.

Locally, we have a robust calendar with tickets starting as low as $5. In Litchfield, we have a Connecticul Wine Festival on July 20th and Podunk Bluegrass Music Festival on August 7th to name a couple. There are plenty of choices on visitnewengland.com providing far more than I can list. In Massachusetts,  Tanglewood Music Center and Shakespeare & Company have superb offerings at great value.

#5 Become An Uber or Lyft Driver

If you are off from school this summer, whether a student and teacher, you may apply to be a driver. Demand may be less in your area so strategize by waiting in a queue at the airports or busy areas. Make sure that thr air conditioning works well in your car. According to ridester.com, you can pick up $155-$210 per month. Consider doing this as a side hustle in the fall if your schedule permits.

#6 Staycation or Vacation or Both

There are more ways to go away with your family at many different price points.

The benefits of a staycation is to be a tourist in your own backyard, returning to your own bed at night, and not having to pack and unpack. It can be cheaper but requires planning so your family doesn’t just laze around.

Everyone should have input and it should be a mix of play, fun, adventure, and sightseeing. Find adventure beaches, lakes, and parks on nice days. Consider museums and theater on rainy days.

Vacations Can Be Cheaper At The Last Minute

To save money on vacations, consider booking flights last minute when tickets are often cheaper. Book early morning flights. Your kids may hate you but they can sleep on the plane. This works if you and your family are flexible and will several alternative places in mind.

Someone told me to search flights via an incognito window and a regular window. You sometimes get two different prices. Before you officially book, consider if there are available accommodations.

Airbnb may help in finding attractively priced rooms to stay. It is great way to save money when travelling with kids and one hotel room will not cut it. Booking a last minute cruise may also work well.

Driving Vacations

Driving vacations works if everyone is comfortable in a car for hours at a time. Planning stops are vital for breaks. Our kids sleep in the car so it often defeats the purpose of going on scenic routes. When I wake them they are often crabby… I think I just talked myself out of a driving vacation. It works well when everyone enjoys the ride and  its a “spur of the moment” adventure.

One way to save money on a trip is consider the costs ahead of time for the some the sights. A visit to a Disney Park is far more expensive than going to a National Park.

# 7 Disney Parks

The one day tickets for Disney per family member over 10 years old (3-9 years are not much less) range from $129-$199 for regular or peak prices, whether you are going to one park or hopping to their other parks on site. Food and beverages are super expensive in the park.

There are slight discounts if you buy multi-day packages but you will need to book your hotel stay which is expensive if you stay within the park. If you are going this summer, try to target August when it is off-peak and less crowded (but very hot!).

#8 National Parks

There are so many parks to visit with families in the US. Annual passes per vehicle are $80 per year. There are more than 2,000 Federal recreation sites. Certain parks particularly cater to children and are clustered in areas you can drive to like those in Utah. Hiking, fishing and rafting can be enjoyed by families. You can stay in hotels not far from entrances and your kids can use the pools.

# 9 Raise Your Thermostat

Setting the thermostat a few degrees higher in the summer will not likely be noticed by your family (maybe the dog, though) but it does save money. By some accounts, each degree raised over 72 degrees, saves 1-3% in energy costs. We raise the thermostat in rooms we don’t occupy as much and have ceiling fans that help with cooling. The nights are cool so we rarely use air conditioning.

Unplug less frequently used appliances. Most homes run more than 40 appliances. These account for about 10% of our energy bill. You will not only save costs but plugged appliances can be a fire hazard.

#10 No More Plastic Bottles

We have not used plastic bottles for a long time, especially in the summer. They never stayed cold enough and the suspicious bubbles worried me. I have the 32 oz. steel insulated bottle by Takeya which keeps the water cold significantly longer. I bought one for each of my family members but they prefer smaller bottles to fit with our car. I am happy with mine.

#11 Cut Out Expensive Lattes Even Iced Ones

I had to be weaned off lattes after I finished law school and studied for the bar in Starbucks. I enjoyed iced lattes in the summer but at $5 a pop, it felt like an investment. I have also stopped drinking carbonated water and soda in restaurant. If I am going to drink in a restaurant, I’d rather have wine or martini so my latte savings go there.

#12 Lawn Care

Keeping your grass healthy and green is expensive. A sprinkler system is generally can be used to save water costs. If it rains you don’t need the sprinkler on. You can reuse your rainwater by installing a collection system near your roof or gutter system. If you are planning a garden, consider planting low-water perennials which are drought-tolerant and use more wildflowers.

#13 Visit Your Library

Use your local library for books, online music, audibles, and film. We own a lot of books, always a treat for me, but they take up a lot of space. I enjoy going to our wonderful small town library in Goshen, especially in the summer, and walking out with my arms full.

I confess to being a bit of a nerd. Growing up, my mom, my brother Mark, and I went to our library the last day of school with summer ahead. It was our ritual to take 12 books each and put in my mom’s shopping cart. They were due the day after Labor Day, only time of year we were able to keep them longer than four weeks.

#14 DIY Projects

Learn how to do more things on your own without outside help. Our kids tend to be far more handy than my husband or I. They are also more willing to watch videos to learn how to repair, clean, and make things in our home. We bathe our dog more often in the summer because our dog rolls in the dirt. Less trips to the groomer helps our wallet.

#15 Delay Purchases You Want

Don’t buy everything you want immediately. Delay gratification of buying things you really don’t need. Give yourself time to research and decide if you want it. You can even put into your shopping cart online for a few days. You may even find a coupon there that provides a few dollars off your purchase.

It is often fun to save money by reducing costs, spending les,s or making some extra money from a side hustle. It is particularly rewarding when your kids participate in the endeavor. My daughter Alex has particularly shown an interest in recent months. She keeps coming up with ideas. She has share these thoughts with her teen friends on social media.

I am sure I have missed some ways to save money. It feels good to experience to have extra money for investments, a vacation, a car, or something of value. How are you saving money these days?

Please share your experiences and thoughts with us. We would like to hear from you!















10 Tips To Handle Stock Market Volatility

10 Tips To Handle Stock Market Volatility

“The intelligent investor is a realist who sells to optimists and buys from pessimists.”  Benjamin Graham


“The stock market is a device to transfer money from the impatient to the patient.” Warren Buffett


The financial markets are always in flux.

Investors tend to dislike turbulence but need to understand that it happens. Periods of calm alternate with volatility. Turbulence is a force of nature of the stock markets to be reckoned with. Often, that is the best time to buy stocks of good companies.

Markets regularly adjust to changes in economic fundamentals, business cycles and current valuation levels. Stock prices are influenced by interest rates, sensitive to economic growth and steered by company earnings.

Higher levels of noise can impact the financial news cycles, adding more angst for the average investor.

Market Volatility Should Be Expected

There have been 11 historic bear markets (declines of 20% or more from their high) since the Great Depression (October 1929-June 1932). That was among the longest and most severe, reflecting an 86% decline from the high to the low S&P 500 prices  in 34 months.

In comparison, the bear market caused by the Great Recession lasted from late 2007 to March 2009, causing a pullback of 56%.

Those were particularly painful declines, causing many investors to lose money as they sold their shares out of fear. Had they held on to their shares, or bought more at the trough, they would have seen the market rise 68% by March 2010.

Who can forget the tantrums the market threw after the Powell-led Fed raised the fed funds rate by a quarter of a point in mid December 2018. This caused the Dow to lose over 1,800 points within the following four trading sessions in a volatile year. Stocks have recovered in 2019 year-to-date.

Related post: 11 Reasons Why Investors Need To Understand The Fed

Corrections are more common, less severe and shorter than bear markets. They occur about every 15-17 months with price declines of 10% from their high. While we can’t control when markets fall into bear territory or corrections, we can better prepare for them with a financial plan.

A Good Financial Plan Helps To Navigate Volatility Better

Having a financial plan that helps you meet your financial goals for the long term is important. Investing for the long term does not mean you don’t make changes in the short term to address market movements. You may also want to speak to a financial planner about your risk tolerance and plans for the future.

1. Put Your Financial Life In Order

Before investing, make sure you have savings that can pay for your basic needs now and for any unforeseen circumstances. Create an ample emergency fund that is liquid and can take care of six months of monthly fixed costs such as rent or mortgage, food, and car payments, and along with unplanned financial costs.

Take advantage of your employer’s 401 K retirement plan, if offered, by contributing the maximum amount from your paycheck to their match. By saving for retirement, you are beginning the process of investing for your future.

2. Diversification

As you accumulate assets, you want to allocate your portfolio among different classes and different types of accounts. You want to spread risk into different but complementary baskets such as stocks, money markets bonds, and real estate.

Invest some of your money in cash-equivalent securities like money markets and Treasuries. While they will generate lower returns, they will be a comfort in times of market volatility.

Diversification of your portfolio is important whether on your own through outright stock purchases, by buying low-cost index funds, or in consultation with a financial advisor.

Related Post: 10 Tips To Diversify Your Portfolio

3. Asset Allocation

You should target different allocations based on your age and retirement plans.

Usually, the younger you are, the greater the risk tolerance you have. You will invest differently when you are in your 20s and have a longer time horizon. Compounding your investment returns can enhance your wealth substantially.

In your 60s, preservation of capital is more of a priority because retirement is approaching. Review your investing and rebalancing strategies periodically to make sure your holdings reflect your goals.

Set up different investing accounts depending on its purpose, notably for retirement, 529 savings plan, and insurance.

4. Don’t Sell Your Stocks Out Of Panic

We get very emotional when we lose money in the stock market. I know I have gotten anxious when my stocks are declining for days or weeks on end. Funny how we don’t react that way when our stocks soar in our portfolio.

It is not unusual to feel dread at prolonged declines in the market. The market can be a very humbling place to be in. Sometimes stocks decline on no new news yet the drops feel like they are on automatic pilot. The financial news headlines sound like the opposite of what you read the day before.

Remember that you haven’t lost a penny until you sell your stocks. The stocks are only declining on paper. If you sell your stocks based on fear, you may be making a premature exit. In the past, I have sold some positions in choppy markets only to find it difficult to buy them back  when the market recovered.

It helps to remember your long term investing perspective. Weakness in the market is part of the short term adjustments that occur regularly albeit unpredictably.

5. Keep Emotions In Check

Don’t act irrationally. If you have food on the table, a roof over your head, you and your loved ones are healthy, things are good.

“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control.” Charlie Munger


Biases Cause Us To Make Mistakes

Avoid “action bias.” Behavioral scientists use that term to describe why we sell our stocks when markets go down. We feel we need to do something when we get anxious. Sometimes we sell our risky assets for reduced amounts of cash.

Sometimes we sell our winning stocks that have some gains in them. This is known as “disposition effect.”  This is often a mistake because these stocks may have better long term potential and you may end with a portfolio that has more losers than previously.

Availability bias is a cognitive bias that may cause people to incorrectly assess the likelihood of events by remembering past events. For example, the correction in the market may remind us of what we experienced during the financial crisis. We recall how stocks dropped more than 50% during a once-in-a-lifetime event and sell our positions to avoid repeating those losses.


Another mistake commonly made is when we don’t want to sell a stock because it is below the price we paid. So we hope it will get to that price and sell it then. This called “anchoring.”

We need to look at the stock at its current price and decide if we still like it for its fundamentals, rather than what our cost is. The company may have stumbled and a new management is promising. Keeping the stock makes sense. However, if the company’s fundamentals have deteriorated or if it is restating past financial statements, we may need to sell this position even if it is below our cost.


Another bias when invested in the market is overconfidence. Studies show that 75% of us see ourselves as above average, which is mathematically impossible. Therefore, overconfidence is especially a dangerous bias to have in financial markets because we can overestimate our knowledge and abilities while underestimating risks.

6. Don’t Time The Market

You always hear the adages: “As January Goes, So Goes the Year,” “Sell in May and Go Away,” “Buy Low” and “Sell High,” but no one can truly time the market. No one can predict the beginning of a recovery with precision or sell on the perfect day before the start of correction.

If you must invest according to a saying, then use one of my favorite’s of Warren Buffett’s: “Be fearful when others are greedy and greedy when others are fearful.”

Buffett’s wisdom is contrarian and means that when stock prices rise and markets get overbought, it is time to exercise caution. On the other hand, when stock prices decline and the market is oversold, it is time to look for bargains. Don’t buy as markets climb.

Jumping in and out of the market is fraught with costly mistakes for average investor, besides the commission payments. Good investors maintain their stock exposure while making adjustments to their holdings and allocation.

7. Be Patient As Investors

Most investors lack patience, especially younger investors. A Schroders global investor study found that investors tend toward short-term investing, expecting to hold their investments three years on average. However, investors ages 18-35 desire a minimum return over 10.2% but expect to hold investments for just 1.5 years. This is unrealistic.

Over the longer term, stock investors have enjoyed annual returns of around 10% based on S&P 500 prices over 80 years. However, investors rode out “boom and bust” cycles during that time .

It is no wonder the best investors like Warren Buffett practice “Buy-Hold” strategies for their investment portfolio and outperform the market.

Tolstoy said, “The two most powerful warriors are patience and time.”

 8. Use Disciplined Approaches

Pruning Your Winners

Long term investors often prune their positions that have become outsized in their portfolios. Investors should practice good discipline. Consider selling part of your position when you have reached a gain of 20-25% over your purchase price.

Knowing when to take profits is always tricky. As a subscriber to Investor Business Daily and their products, I have benefited from exercising their prescribed discipline. A wise Wall Street adage says, “Bulls make money, bears make money, pigs get slaughtered” reminds us not to get to greedy about our profits.

Dollar-Cost Averaging

When buying a new position for your portfolio, buy your targeted stock in parts. For example, if you are expecting to buy a $20,000 (or $100,000) position of a stock, start with 25% of your position, and use your cash to buy the dips over time to bring the average cost of the position down, if you still believe strongly in the merits of the holding.

There will usually be opportunities to buy at a lower price. If it doesn’t come, you probably have a high quality problem with a potentially winning stock.

9. Meeting With A Financial Professional

As individuals, our risk thresholds differ based on our lifestyle, age and future plans. Investing is a wonderful way to grow your wealth. Building your goal-oriented personal approach requires diligence, knowledge, and perseverance.  You need to understand investment risk, allocation, diversification, and how to make rational financial decisions.

It is prudent to meet with a financial professional to help you proactively plan and implement strategies to achieve your financial goals. These strategies can broaden to tax planning, estate planning and family wealth.

It is also helpful to have a sounding board when you feel concerned about market turbulence. They can talk you down from the sometimes emotional roller coast that accompanies being an investor. Depending on your financial professional, they can provide their own wealth of knowledge and experience and that of the team they may be working with.

10. Your Financial Plan Is Your Long Term Road Map

It probably goes without saying, that you need to be diligent about your assets, their returns and your comfort level with your financial professional, if you have one. Do your own research. There are a lot of resources to educate you about your investments, read company releases and financial documents, listen to or read company transcripts from investor meetings or earning calls.

Do your holdings fit with your current lifestyle. Review your plan for potential life changes like marriage, children, divorce, college, second careers, and retirement.

There are many trade-offs you and your family may need to make. A good financial plan should be reviewed throughout your life. There is an indelible scene from Alice in Wonderful by Lewis Carroll that resonates with investors and financial planners alike.

Alice is at a fork in the road. “Which road do I take?” She asked.

“Where do you want to go? responded the Cheshire Cat.

“I don’t know,” Alice answered.

“Then, it doesn’t matter” said the Cat.

With a sound investment strategy and a good financial plan, you can build your wealth for the long term.

Consider subscribing to The Cents of Money blog and our growing community!  Get our free weekly newsletter and other freebies to help you.  We have a free email course that deals with several key personal finance topics.

What do you find most challenging about investing? What works to offset that challenge? Please share your experiences with us. We would love to hear from you!
















10 Benefits of Going To Community College

10 Benefits of Going To Community College

“I wanted to race cars. I didn’t like school, and all I wanted to do was work on cars. But right before I graduated, I got into a really bad car accident, and I spent that summer in the hospital thinking about where I was heading. I decided to take education more seriously and go to a community college.” George Lucas, American filmaker


“With the changing economy, no one has lifetime employment. But community colleges provide lifetime employability.” Barack Obama

Attending a community college is attracting dependent students with varying parent income from a broader economic background. Though a large proportion of students come from low income families, more students from middle-to upper middle income with annual earnings of $100,000 or more, are turning to community colleges

The rising national student debt serves as a burdensome overhang on individuals for years. Many postpone their plans like getting married, having children, buying a home or saving for retirement.

Many Merits

The value of community college is being realized in a post-recession student debt crisis world. Recent studies have highlighted improving earnings prospects, particularly associated with certain majors like nursing, engineering, STEM, and  job-specific or skill training programs.

There are more than 1,100 community colleges nationwide currently enrolling  more than 12 million students in classes annually. According to the National Center for Education Statistics (NCES), 34% of all undergrads in the US attended community colleges in 2016 (17% full-time and 58% part-time).

Two Year Degrees

Students can earn two-year degrees, notably Associate of Arts, Associate of Science, or Associate of Applied Science, along with certificate programs that take various times to complete. The two year degrees may sometimes be completed in that timeframe but on average are closer to 3.5-4 years.

Colleges sometimes partner with four year institutions so students to earn joint degrees such as forensic accounting.

I am a tenured professor at an urban community college and I have added my two cents where helpful on the hopes I don’t sound too biased.

Let’s review the benefits and drawbacks of community college.




1. More Affordable To Attend A Community College

The average annual (two semesters) tuition and fees in 2018-19 were $3,660 for instate public community college as compared to $10,230 instate public four year college, $26,290 out of state public four year college and $35,830 for private colleges and universities. This doesn’t include room and board costs.

According to The College Board, 56% of independent students and 50% of dependent students at 2 year colleges do not pay any tuition and fees because of grant aid and tax benefits provided.

Additional room and board annual  ranges from $8,660-$12,680 for community colleges and the higher priced four year private college, respectively. About 28% of community colleges offer on-campus living arrangements. However, most community college students do not incur room and board costs. They either live off campus or with their parents near school.

Related Post: How To Pay For College: A Family Guide

 2. Use Your 529 Savings Plan

Tuition costs associated with community college are qualified expenses that can be withdrawn tax-free from your 529 Savings Plan. To reduce your need for borrowing, make use of these tax-deferred plans by saving for your child’s college education as early as feasibly possible.

3. Less Student Debt For Community College Students

As a result of lower tuition and many living at or close to home, community college students carry less debt: 59% earned two year degree without borrowing to pay for school; 18% graduated with less than $10,000 in loans. Most of the loans are applied for through the Federal aid,  specifically, by filing a FAFSA (Free Application for Federal Student Aid) application.

Although they have less overall debt than students in four year colleges, the community college cohort default rates (CDR) for 2015 dropped to 16.7% from the year-earlier. However, the national default rate was 10.3%, with public four year institutions having default rate of 7.1%.

CDRs are the percentages of a school’s borrowers who start repayments on certain federal loans during a particular year. Default rates rise to the 20+% range when repayments are calculated within 10 or 12 years of entering college. The higher rates are often concentrated in minority neighborhoods.

4. A Great Place To Strengthen Your Focus and Transcript

Many students have less than stellar grades in high school and aren’t able to pursue scholarships or get into their first school choice. They may not  know what major or career they are interested in. Community college may be a great way to start, achieve A’s in the basic courses you would be taking in four year schools anyway.

It can provide extra time to buckle down, learn about different majors, and explore different options. It gives more time to explore four year colleges that meet more ripened expectations. Personal and academic growth occurs at different speeds and maturity. These colleges can be an intermediate place for strengthen your writing, communications, critical thinking, and technical skills.

Finding Our Interests At Different Times

I started college at a 4 year public college just as I turned 16 years old. I was a first generation to go to college. I often felt lost, lacked motivation, and focus in my undergraduate studies. I opted for a liberal arts major as an undergrad. It wasn’t until I enjoyed working at a bank and I transitioned to a business (MBA) program that I found my passion later in my 20s.

5. Greater Flexibility

For those students who are parents, help their families,  have work schedules or need amenable arrangements, community college can be more accommodative. There are night and weekend classes for students who have 9-5 jobs, or need to adjust class schedules as Uber drivers, for example.

Often, adult students return to school after taking a long break and find their interests in certain programs.

By going close to a college close to home, you have more opportunities to take care of your personal needs. You may have more study space, able to make your meals and do laundry more affordably.

6. More Diversity

Broad demographics at community colleges provide a comfortable atmosphere for older students, working students, parents, and greater diversity. It is well known that two year colleges serve a large proportion of minority, first generation, low income, and adult students.

About 44% of students are 25 years or older. White students account for 49% of students, with a diverse mix of African Americans, Hispanics and Asians accounting for the rest. While 31% of dependent students’ parent annual income are below $30,000, 17% are from parents making $100,000 or more.

7. Smaller Class Sizes And More Support

Classes range from 150-300 students in four year colleges and can be impersonal. Classes are far smaller at community colleges, more likely to be 25-35 students on average. Students get a lot more personalized attention either in the classroom or meeting with their professors. Community colleges offer significant resources to students such as writing and tutoring centers.

8. Quality of Professors

From my experience as a communities college professor, I generally know many of my students well, and meet with them frequently about the courses and their business career interests. (I know I am sounding biased here.)

The quality of tenured professors I work with is high. They publish in high caliber peer-reviewed journals, have worked in their respective fields, and are dedicated to their students. Many professors are faculty advisors for student-run clubs, competitions and events. This leads to more professor-student interaction.

At some of largest and sometimes most exclusive colleges, you may taught by a teaching assistant (TA) linked to your professor. You may have less interaction with your chosen professor than with the TA for certain courses.

9. Community College Graduates Earnings Potential

The average student who completes an associate’s degree will earn $5,400 more each working year than a student who drops out of community college. The average is from the range of $4,640-$7,160 per year based on a working paper by Clive Belfield and Thomas Bailey.

However, a study in Washington State examined returns of graduates with associate degrees in STEM, nursing and construction found that they do significantly better than degrees in humanities, for example.

10. Lifetime Earnings Vary By Degree

Lifetime earnings illustrate the disparity between completing degrees from high school, community college and four year college. On average, lifetime earnings are:

  • $1,304,000 for a high school degree;
  • $1,727,000 for an associate’s degree; and
  • $2,268,000 for a bachelor’s degree.


And By Major

The $1 million difference between the above degrees changes to $3.4 million when you calculate the difference between the lowest paying majors and the highest paying majors like architecture and engineering. Quite a gap!

Additional research has also disclosed out that those with associate degree’s in many applied and technical fields can actually outearn bachelor’s degree counterparts five years post-completion.

Mark Schneider has been among the most persistent of researchers who have highlighted the value of community colleges, and potentially greater earnings power, particularly for community college students devoting their studies to health, engineering and technical fields.

Another Example

Community college grads who earned associate in science degrees from Florida community colleges earned an average of $47,708, above an average of $36,552 for students who graduated from a Florida four year college.The reason cited for the big gap was that the community colleges may have had a greater focus on job-specific programs.

Still, an average college graduate with a four year degree will generate higher earnings on average than that of community college grads. However, your major or fields of study matter and completion of your respective degree is essential.


1. Course Offerings May Be Limited

Many of the course offerings are basic, designed to address the typical first two years of a traditional program and are credits that will rollover to the senior college. Where there is significant student interest, courses may go beyond the basics.

Increasingly, many community colleges have added more courses to provide certification for certain majors like engineering or nursing, as an example. Some programs offer specialized courses such as Walla Walla College in California, partnering with John Deere to help students understand tractor  mechanics and technical aspects

2. Less Campus Life At Community College

As community colleges are often commuter schools, it will be a less integrated experience than a traditional four year school. However, community colleges will vary. Students may participate in sports, organizations, competitions and clubs.

Students can get involved in student government or write for the school paper. Students at community colleges may be on campus less because of work or living elsewhere.

At the community college I teach and through our business faculty, students proactively join study groups, compete in The Fed (Federal Reserve) Challenge or Mock Trial teams on state or regional basis and become officers of their respective clubs.

3. Credit Transfers May Not Be 100%

Community College Research Center (CCRC) found about 80% of community college students indicate their intention to transfer to four year colleges to complete their bachelor’s degree or higher.

However, research shows that only 29% of students who started in fall 2011 actually transferred to a four year institution. Of the 29% of these students, 42% completed a bachelor’s degree within six years. That equates to about 12% of the 2011 group of entering community college students earning a BA within six years.

How Can This Rate Improve? Be Proactive

Ideally, as community college students benefit from lower tuition costs, you want all your credits to count towards your four year BA degree which usually requires 120 credits. Most community colleges have transfer agreements (sometimes called articulation agreements) which are formal agreements with four year colleges documenting the transfer policies.

These agreements provide assurance that your credits will be accepted by the senior college. There are times though you may lose credits if the content of the community college course is not in line with requirements of the senior college.

Keep Track Of Your Transferrable Credits

Losing these credits can be frustrating for community college students hoping their classes count towards their graduation at four year schools. It is the student’s responsibility as well as their community college’s to keep track of transferrable credits.

It is important to do your research about the programs at your preferred college you may be interested in going to. Meet with your advisers who may have updated information and can guide you during course registration.

Make sure to attend transfer programs on your campus. You can meet with admissions officers from your preferred college list and learn how they will treat your credits before you apply there.

Picking your college is an individual choice and you have many schools to choose from.

For many, community college can be a great choice, allowing you to save money, and mature into stronger students. If you need flexibility because of your life schedule, it may be a perfect solution for you.

You may attend community college as an accomplishment on its own or as a stepping stone to a four year degree or more.

A Favorite Success Story To Share!

Early in my career as a professor, I got to know one of my students in my business law class. A few weeks into the term, she admitted to me that she did not like business law at all. I told her to give it more time and to stop by if she needed help in picking a case for her term project.

The assignment was to pick a constitutional case with a meaningful precedent, and to research future cases and legal research about this precedent. She picked Brown vs Board of Education, a 1954 case. Her paper was amazing with terrific research and she received a well deserved an A.

She said she enjoyed the law class after all. She graduated with Honors, went on to complete four year bachelor’s degree. Before she graduated she came to visit me, asking for a recommendation.

I said, “Sure, but where?”

She said, “You know, professor. LAW SCHOOL!”

This student received acceptances and scholarships from several law schools and today is currently practicing. While this story stands out, I have many student success stories to share in the future.

Have you considered community college among your choices? What was most important to you when making your final decision? We would like to hear from you!













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