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Money magazine published a lengthy article detailing some of the ways that the economic crisis is affecting us.  They begin:

A new set of American values is emerging from the ashes of 600,000 layoffs a month, a lost decade in stocks, and the worst housing crash ever. These values may ring familiar to anyone who lived through the Great Depression. But for most of us it amounts to a large-scale makeover of the way we think about money and life……

We’re not just cutting our bills, we’re rejecting materialism. We’re placing safety and intrinsic rewards like relationships and personal growth ahead of profit. We’re embracing family and community and asking how we can help others, not just ourselves.

I can certainly see that the recession is effecting all of us, but is it really a large scale makeover? Is it really making us embrace family and community? Or is it a temporary adjustment that will be discarded as soon as things improve?

To back their claims up they cite a survey by Marketing & Research Resources which reports that 94% of respondents are changing their financial habits for good.  For comparison, a recent Gallup poll reported that 51% of Americans thought that their changes in saving or spending habits would be permanent.  And the Gallup poll was a bit more pessimistic about whether that 51% would actually maintain the changes.

Continuing with the Money Magazine article.  They list several areas where they say think that the economic crisis is causing lasting change.

1. Debt is out.
2. Conspicuous consumption is out.
3. Lack of trust for the financial sector.
4. Your job is your best asset.
5. The new focus on family and the community.

My take on these:

1. Let’s hope that we’re past the debt habit.  I for one, won’t be missing debt.
2. Personally, I think conspicuous consumption is on hold, not dead.  Right now people are too busy flaunting frugality.  When the frugality fad fades we’ll go back to keeping up with the Jones’s.  Let’s be honest, there isn’t a new model of frugality coming out each year.  A new model of Lexus or iPhone comes out every year or two.
3. The lack of trust for the financials is definitely here to stay.  At least until the middle of the next boom.
4. In this recession, people like their jobs because they realize how fragile they are.  In other words, they don’t want to get laid off because their job pays the bills and they are probably still in debt.  I doubt that people love their jobs because the work suddenly became interesting and meaningful as soon as the economy tanked.  People will go right back to hating their jobs as soon as the specter of unemployment passes.
5. If this has happened I haven’t noticed it.  I hope it’s true, but I remain skeptical until proven otherwise.

Overall I think the article is a good read even if you’re a bit skeptical of all it’s claims.

What about you?  Do you agree with the article or do you think it’s a little too rosey?  What about the five points they outlined?  Do you see those changes happening around you?  Do you think they are permanent?

It used to be that only bloggers and web developers had to worry about optimizing their work for search engines to read them.  But not any more.  A Fortune Magazine article discusses how search engines now scan all the resumes that come into a company.

When a resume is submitted, the software parses, scans and breaks out the applicant’s levels of experience. It summarizes some of the key elements for the hiring manager, who can also filter and define criteria. If an applicant meets all the criteria, he or she is considered an “ace candidate” and goes to the top of the list…

Hiring managers set the candidate requirements - years of experience, level of education, location, etc. - and also can determine how many of these parameters the applicant must match.

They go on to advise that you take the job description, pick out key words and phrases and try to make sure that those appear on your resume.  I think this is good advice and well worth trying if you aren’t getting anywhere in your job search.  Everything that you can do to get your resume into the hands of an actual human hiring manager is worth trying.

I’d also like to say ‘ug’ to this whole search engine optimization for resumes thing.  The majority of people applying for jobs aren’t in technology and don’t know jack about search engines.  Making job applicants jump through yet another hoop because human resources is too busy lazy to do it’s job properly gets under my skin.

MSNBC reports on the essentials of keeping your skills sharp if you are laid off of your job.

“Maintaining your skills and advancing your skills is critical to advancing if you’re employed, and getting a new job if you’re unemployed,” ….. But how do you stay on top of your field when you’ve been downsized? Tracy and other career counseling experts identified three potential avenues: continuing education, professional organizations and volunteering.

The ideas for using the first two of these avenues are unfortunately weak at best.  You lost your job so spend lots of money taking classes.  Become the membership chairman of your professional organization.

They do make two great points in this article which I’m wanted to share with you.  First, tap into social networking.

Social networking, he said, is a good place to get acquainted with the expanding possibilities online. It’s an area that is easily self-taught, and one that can have numerous applications once you’re back in the workplace. As a bonus, establishing a network of contacts can also help during a job hunt. Pointing to a 24-year-old staffer at his company who has 4,000 “friends” on MySpace and 300 connections on LinkedIn, Straits said, “He will never have a problem connecting to a position.

This is an excellent idea that I hadn’t really thought of before.  I’m going to have to make a point to learn how to become a Linkedin power user.  To be honest with you, I’d like to keep my Myspace and Facebook accounts purely personal.  If there is any risk that your friends will be posting goofy pictures of you, keep potential employers away.  One potential problem with this is that if you don’t already have much of a social network, it’s unlikely that you’ll be able to build one in a timely enough fashion to help land a new job.

Second, volunteer in ways that put your professional skills to use.

If you’re searching for a suitable spot, look for organizations that connect volunteers with nonprofits needing expert help. The Taproot Foundation is one national group that provides pro bono help with things like strategic planning, annual report preparation and marketing.

This sounds like a great way to use your skills helping out a non-profit while adding to your resume at the same time.  And here’s a link to the Taproot Foundation if you are interested.

I’m also interested in finding out whether volunteering outside your area of expertise is a good idea.  For example is joining the Peace Corps for a year an acceptable way to deal with a layoff.  Would potential future employers look positively or poorly at your decision to ride out the economic suckfest by doing meaningful volunteer work abroad?  I don’t know.  If you have any insights, please comment.

I recently experienced tremendous success in reducing my cable bill.  I’ve heard numerous times that you could have your cable bill lowered by calling and haggling.  Thing is, I hate haggling.  I mean I really don’t like it at all.  But in the interest of saving money I tried it anyways.  I wanted to see if a non haggler could pull this off.  Given that the experiment was successful I thought that I would share with you exactly how I did it.

The first thing that I did was call up my cable company, Charter Communications.  As you might expect I got connected to some call center in India.

I calmly explained my issue to “Chris;”  That the economy is bad that I was was calling to see if there was any way I could get a discount on my internet service (I don’t get cable TV or phone from them).

“Chris” then informed me all about the wonderful bundle package and that I could get the bundle at a promotional rate of…

I reminded him that I wasn’t interested in getting more services and restated my question: Is there way that I can get a discount on my existing service?

Chris rehashed his bundle promotion.  I kept on calmly restating that I didn’t want new services.  I just wanted to see if it was possible for me to get a discount on my existing services.

The fact is that Chris in India has absolutely no power or authority to do anything other than try to sell you the bundled service.  So we had to go through several iterations of him trying to sell me the bundle and me politely refusing it and asking for discount.

The key is to be polite and persistent.  Customer service representatives aren’t supposed to hang up on you so long as you treat them respectfully.

Eventually I made a breakthrough with “Chris” and I got transferred to a lady named Maryanne in America.  Now we were getting somewhere.

She, of course, asked me about the bundle.  I declined.  She asked me about changing or upgrading services.  I declined all of them saying that I was extremely happy with my current services but just wanted to see if there was a way to get a discount because the economy is rough and I need to save money.

She had several real discounts available.  The one I picked was a 2 year contract that lowered my monthly bill from $49.99 + tax to $29.99 + tax.  That’s a savings of $20 a month!  There is a catch, if I terminate the service there is a $75 early termination fee.  But with a savings of $20 a month all I have to do is keep it up for 4 months and I come out ahead.  Furthermore, if I move to an area where Charter doesn’t offer service, the contract is voided and no early termination fee for me.

CNN Money has a short piece detailing bank fees and some steps to take to avoid them.  If there is one thing about me, it is that I loathe bank fees.  Yes, I truly hate them with a burning passion.  Here’s four pieces of advice that the article offers:

1. Don’t use another bank’s ATM
2. Avoid overdraft fees
3. Check the bank’s policies
4. Join a credit union.

Here’s my take:

1. I always try to use my credit union’s ATM.  Alternatively I may use a debit card to get cash back when making a purchase.  Or I just go to the bank and request my money.

2. I would dodge overdraft fees by linking my accounts and keeping a cash buffer in my checking account.  I’d also track all my spending electronically so I’ll know in advance if my buffer is running out.

3. I ask upfront what fees are included.  If they say there is a maintenance fee I say no thanks.  Maintenance fees should be outlawed.

4. I love my credit union.  The people who work there are nice and there are no asinine fees.

Almost all of us save the true workaholics have hobbies.  But have any of us really ever thought about monetizing these hobbies? Actually turning them into revenue generating activities rather than revenue draining activities?  Or at least making a little bit of money to offset the cost of the hobby?  Below are three ways to turn your hobby, whatever it is, into income.

1. Sell your wares
This is the obvious answer that most of us think of when we contemplate monetizing a hobby.  All kinds of activities such as knitting, photography, carpentry, pottery and doll making produce tangible goods that can be sold.  Potential sales venues can range from local craft stores to worldwide via the internet.

2. Write about it
What if your hobby doesn’t produce anything tangible?  What if you are a cat fancier, a philatelist, a numismatist, or a model car collector?  You certainly don’t want to sell your pet or your collections.  Or what if you’re a gym rat?  You can’t really sell that toned physique.  Then do the next best thing, sell your knowledge.  This is most easily accomplished by finding avenues to write about your hobby.  Blogging is an obvious choice but probably not the best if you aren’t willing or able to write frequently.  Consider writing articles for specialty magazines or popular websites about your hobby.  If your columns are well received you could easily be asked back and maybe even become a regular contributor.  Another potential option is to write a book.  Look into traditional publishing, self-publishing and writing an e-book to see if any of these might be a good outlet for your knowledge.

3. Teach a class
If you consider yourself an expert in a given field you might want to try your hand at teaching it.  Most communities have adult or continuing education programs that you could participate in.  Look them up and see if they already have instructors teaching in your field.  If they don’t, then contact the programs and see if they might be interested in allowing you to teach a class.  While teaching a class may seem particularly onerous, keep in mind that many of these kinds of courses are only a handful of lectures (1-4) long.  If that doesn’t work consider advertising your new class or lecture through a local hobby club or put up fliers at area hobby shops.

Whether you are selling your products or your knowledge keep in mind your customers.  Deliver the best quality product you can to them and they’ll reward you by coming back for more and directing their friends and relatives to come by as well.

Money Magazine has a fun little online calculator to determine your financial health.

You start by entering your age and gross income and then answer a few short questions about each of the following categories:

• Housing payments
• Debt
• Emergency fund
• Investment diversification
• Investment in company stock
• Life insurance
• Retirement savings

Here’s some personal finance take home points from the exercise:

• Housing payments should not exceed 28% of your gross income
• Debt payments should not exceed 36% of your gross income
• You should keep at least 3 months worth of living expenses in an emergency fund.
• If you are saving for retirement and want to know a quick and dirty way of determining how much of your savings you should have in stocks use 120 minus your age.  Put the rest into bonds.
• Keep your investment in your company’s stock below 10%.
• You need enough life insurance to replace 5-10 years of your salary if you have young children or significant debts.  Or none at all if you lack these.

I got an ‘A’ on the exercise.  I’m pretty happy about that.

Money Magazine takes on all those people who say that the recent economic downslide proves that diversifying your investments doesn’t work

They say:

Diversification did work last year, even if it didn’t get the investment results you might have preferred.

You see, diversification was never designed to provide a guarantee against losses. No strategy - even sticking to T-bills - can do that.

Rather, the idea behind diversifying is that all your money won’t be subject to the fortunes of one investment or asset class. So to the extent you spread your money around, you’ll experience a broad spectrum of returns, not a single return on all your money.

And check it out, numbers to prove their point:

For the 12 months through the first week of April, for example, large-cap U.S. stocks lost about 39%. Foreign stocks as a group lost about 46%. Real estate-related stocks were down about 59%.

Bonds, meanwhile, fared better, although how much better depended on what types of bonds you owned. Because of the flight to quality, government bonds fared best with long-term government bonds gaining over 10%. Not surprisingly, given concerns about the economy and corporate profitability, high-yield junk bonds did the worst, losing about 21%.

So diversification isn’t dead yet. I remain a strong advocate of a diversified portfolio.  No, diversification will not garuntee you a profit, but it will minimize your exposure to risk.  And that’s a good enough reason to embrace it wholeheartedly.

If you are an introvert, a bit shy or really anything other than a mega-social butterfly you probably hate networking.  But given that the job market has achieved record levels of suck there might not be many options left.  Money Magazine steps in with a great article about how to network if you hate networking.  I recommend that you read the article in full, but you can also check out my executive summary below.

Working a room
- Scope out the scene before you get there
- Get their early (It’s easier to socialize when there are less people around)
- Bring a wingman (especially if they are more social than you)

I really like the one about showing up early.  It’s the easiest to do and I can attest to the fact that conversing with new people is so much easier when the room isn’t full yet.  Alternatively you could stay late and try to network with all the night owls.

One-on-one communication
- Keep in touch when times are good.
- Schedule a lunch or brunch.
- Get the other person talking.
- Give now to hopefully get later.

A pretty good collection, but some are kind of hard to do.  Keeping in touch with a bunch of people that you don’t really have any need to keep up with almost seems to require a schedule to pull off successfully.

Online (Linkedin, Facebook, Twitter, etc.)
- Only friend people you’ve met.
- Get introduced to people who could be useful in your career.
- Give status updates (but make sure that they are meaningful. e.g. I’m attending XYZ Conference, not I’m at home petting the cat)

Just remember to keep your personal and professional networks separate.  The last thing you need is for your professional contacts to see all those crazy pictures of you that your friends are posting.

The even have a list of five icebreakers that you can use while meeting people:

1. How did you land your job?
2. What do you like most about your job?
3. If you weren’t in your current career, what would you be doing?
4. What industry websites or blogs are must-reads for you?
5. Who is your scariest competitor, and why?

I love 1 and 2 on this list because they can be used in pretty much any setting.  You could even use them on job interviews as questions to ask your interviewer.

With the stock market tanking cash seems to be king now.  Money Magazine lists 5 things to know about keeping cash and getting the most out of it.  They are listed below with some commentary.

1. Don’t keep it all in one place

If you have more than $250,000 in cash don’t keep it all in the same bank.  Remember that you are only insured for up to $250,000 per bank.  Also keep in mind that when 2010 roles around that rate drops back down to $100,000.

2. Shop around for better interest rates

You don’t have to keep all your money in a checking account at the corner bank.  Shop around for better interest rates at other banks and consider moving your money into accounts that yield higher returns.

3. Money market funds aren’t a safe bet anymore

If you put your money into a money market fund before September 19th 2008 it is safe because the US Treasury is now insuring it in response to two funds breaking the buck.  If you invested it after September 19th your money then the risk falls on you.

4. Don’t fret inflation

Yes interest rates are so low as to almost be a joke (1-2%) but inflation is hovering somewhere around zero.  So you are still coming out ahead in terms of real return.  Don’t expect inflation to stay at near zero forever.  As the economy improves inflation will go up.  Several economists are also expecting significant inflation to occur in response to the excessive spending and debt being accrued by the Federal Government.

5. Consider “almost cash”

Look around for other stable investments that fall somewhere between money market funds and bond indexes in the risk spectrum.  I don’t think this is a good idea if you anticipate needing your money soon as the markets are still unstable, but if you are interested in investments with a moderate time horizon consider looking into these.