GOTP: The Secret Sauce to Budgeting and Saving

Today, we’re back with our first true post in the Get Off the Pile: Personal Finance Edition Series!

This post is all about budgeting and saving. Not the most thrilling subject, but doing it right can mean you have the ability to enjoy your days and nights, without dreading the next credit card statement or utility bill.

Thankfully, we got some advice from an expert some of you may know. Eric Hanson works at an investment firm in Burlington, and also teaches about personal finance at the Grossman School of Business here at UVM!

He was kind enough to answer some of our questions about budgeting. He laid out a few things to keep in mind, and a different way to think about budgeting:

“First of all, traditional budgeting is not really something many people can do. People can build a budget, but sticking to it is another thing entirely.

1. A better idea with budgeting is “pay yourself first”.  This means setting up a simple system of taking the important things out of your paycheck before you start spending.

This might include your retirement fund contribution, monthly rent payment, emergency fund savings, or student loan payments. Then you can shoe horn your expenses into what your take home pay is, rather than seeing the entire paycheck as available to spend. This is probably a more realistic approach for most people.

2. Live within your means.  This is not as easy as it sounds. Although it is probably not a scientific fact, I have found that many people are either spenders or savings.

If you are spender it is very hard to convince you to do any saving.  If you are a saver you will continue saving indefinitely. Most of us are neither extreme spenders or extreme savers but somewhere in the middle. This means there’s room for us to learn from our mistakes, and get better at saving as we grow.

3. Save as early and as much as you can. The secret sauce to saving early is compound interest.  This is the phenomenon of earning interest on interest.

Albert Einstein called this the most powerful force in the world and the earlier you get started saving, the more powerful compound interest is.

This means in your 401k plan, your 403b plan or whatever you have available.  Most people sign up for a small amount of withholding for retirement when they start working. Then five years later, if you ask them they can’t remember what they signed up for and they certainly are not saving to the maximum.

To start, you should at least save what the corporate match is (if you have one). This is free money and basically a 100% return on anything you contribute.  For instance if you put up 4% and the corporate match is 4%, you are saving 8% and you have a 100% return.

If you don’t have a match, just contribute something — even if it’s small — to get into the habit of saving and start cashing in on the power of compound interest.

4. Do not abuse credit.  There is no way you can possibly justify paying 15% to 25% on credit card balances.  You should pay off your credit card every month, period.

This is very difficult for young people because Madison Avenue is extremely good at convincing us any “want” we have is a real “need”.

There’s no worse way to blow-up your budget than to see credit card debt grow each month.

5. Get Insurance.  Young people need to remember that bad things can happen to good people.  Auto insurance, health insurance, and life insurance are important and in many cases the earlier you buy the cheaper the price.

If you can, build these into your budget — particularly if you can get health and life insurance through your employer because they can come directly out of your paycheck (see the “pay yourself first” paragraph above)

6. Start thinking about the future. Scary, I know. But, putting some money away that you don’t touch for a while is critical. Whether you want to save to buy a house, a car, or a trip, it usually takes planning and time — so get started!

For example, most young people are not going to accumulate enough savings for a down payment until they are at least in their 30’s, so it is good to set a goal and start now.

Or, if you aren’t a long-term planner, just stashing away some money each month for emergencies can be one of the best budgeting decisions you make.

Now, for some resources:

If you want to learn more you can check out these resources that Eric recommends.

  • If you want to go seriously in-depth, you can check out the textbook that Eric uses for his UVM course here. It’s pricey, but very comprehensive.
  • If you’re looking for something a little more fun than a textbook, you can check out The Index Card by Olen & Pollack. They set out to prove that everything you need to know about personal finance can fit on an index card!

And here are a few of our favorite resources here at Afterword:

Remember: This is big stuff, and can be pretty freaky to think about. Talking with Eric gave us a lot to think about in our own finances, and we all learned something new from his advice.

Mostly, he reminded us of a few important things:

  • Don’t be compulsive, but do have a plan.
  • Get involved in your community – volunteer!
  • Spend your money, that’s what it’s there for.

Okay gang, that’s all for this week. Let us know if you have any questions that you think we might be able to answer, or anything that you’d like us to pass on to Eric.

Have a great weekend!

 

Get Off the Pile: Survey Results!

Remember two weeks ago when you took a survey about personal finance for us?

We’re here to report back on the results, and take a look at what topics within the world of personal finance you all would like to learn more about!

So, Let’s check it out.

tl;dr: You all are interested in hearing more about the important stuff, like retirement funds, investing, and budgeting – Awesome!

The more we looked at these results, the more realized your interests boiled down to two thematic categories: Personal budgeting and Employee benefits.

A lot of you had suggestions on other topics for us to cover, and we’ll weave those in as well. First, we’re going to tackle some of these bigger topics, and then circle back to some of your suggestions.

In the meantime, we’ve reached out to our personal finance experts to get their input, including a professor here at UVM and an alum who is a professional financial advisor

We’re also collecting top-notch and easy-to-use resources from across the internet, so you’ll have access to all the personal finance information you could ever want!

Remember, we’re not experts at this either. So, we’re looking forward to learning about these things as much as you are!

Thanks for following along,

Kathryn ’15 and Ryan ’10

Get Off the Pile: Cover Letters, 2017 Edition

Here at Afterword, we want to provide helpful advice to guide you through the real world of job searches, interviews, personal finance and much more. This series “Get Off the Pile” is where we focus on these topics.

Right now, a lot of you are job searching, or preparing for that process as the summer winds down, so, this week we ask “how can you get off the pile of endless applications with a stellar cover letter”?

Andrew Flewelling, our HR expert at the UVM Foundation has some helpful tips for how to write great cover letters. Andrew has a graduate degree from UVM and is the Senior Director of Human Resources here at the UVM Foundation. Today he’s going to discuss writing expert cover letters.

The Basics

When it comes to cover letters, the most common mistake I see is that the applicant merely restates what their resume says. I CAN read, so there is no need to make a sentence out of a bullet that is listed on the next page.

Instead, a good cover letter is one that does my work for me. It clearly articulates why the position is of interest; and illuminates the skills and abilities that make the applicant special.

It’s great to talk about a few (2-3 max) examples of success. Bonus points if the applicant can quantify the success (% increase, overall sales, maximized efficiency by x measure, etc…).

What Makes a Cover Letter Stand Out?

The letters that really stand out are the ones in which the applicant takes their experiences, skills, and successes, and synthesizes them for me, highlighting their direct and/or transferable nature for the position they seek. The best letters demonstrate that the writer knows enough about the position to be able to overlay their own skills on what we are looking for.

Tips for Writing a Stand-out Cover Letter

1. Keep it to one page. And be aware of the formatting — dense, long paragraphs in eight point type are not good practice.

2. State the important. In the opening paragraph, mention the position applied for and where the listing was posted. In the rest of the letter, discuss what the position requires (skills, characteristics, temperament, values, etc.) and demonstrate/prove that you possess those requirements.

3. Mix it up. Use a good mixture of short declarative statements and longer, multi clause sentences to make sure the letter flows.

4. Be Yourself. Don’t be afraid to inject a bit of personal passion. Depending on the position, it may be appropriate to articulate your understanding of the importance of the position to the company, industry, society overall. You should also be able to articulate why the position is important to you.

5. Read it out loud. Hearing yourself will help you catch mistakes, missed references or awkward phrasing. Have a friend do this with you too, it always helps to double check.

6. Proofread to perfection. Incorrect grammar, spelling, and punctuation are non-negotiable deal breakers.

2017 Check-In Survey: Results

Last week we asked ya’ll to take a quick survey and let us know where you’re at in your post college adventure. We want to know more about you, so we can you the most relevant info and resources.

Beyond that, we think it’s important for you all to see where your classmates are in their journey, because we’re all out in this crazy world together, doing the best we can.

 

 

 

 

 

 

So, without further ado…

 

Looks like you all want diverse subjects covered here on the blog- And we’re excited to bring that to you!

It’s awesome that so many of you have landed a new job right after college, and we’ll be bringing career advice throughout the year.

Understandably, the relationships and connections made here at UVM are most important to y’all.

We’ll keep you posted of any events are coming up, to keep those UVM connections alive!

If any of this makes you nervous, don’t worry. When we did this survey with last year’s grads, they were pretty much in the same place you are.

Beyond these graphs, a few of you had some great suggestions for things that we should include on the blog, including more pictures of animals, funny video skits, Greek life updates, transitioning into the job market, more UVM Alumni stories, post grad life hacks… the list goes on and on!

But don’t worry, we hear you. We’ll be bringing you helpful info around jobs, general life advice, as well as all the relatable animal gifs the internet has to offer.

Thanks for following along,

Kathryn ’15 and Ryan ’10

MFYO – Nathaniel Fuchs ’16

This week we are checking in with another one of your classmates – Nathaniel Fuchs!

He is the recipient of a Fulbright grant to do research in Norway this fall. Check out his post grad story.

Describe your first year out of UVM.

I have been fortunate in my first year out of UVM and I’m grateful for the friends, family and places that have made it so interesting. But first of all WOW… it’s been a whole year!

It boggles the mind, graduation seems like a moment ago.

To give a brief timeline I started the summer working for UVM’s Spatial Analysis Lab (SAL) as a Team lead, left for six weeks to work as hiking crew in the Olympic Mountains of Washington state, came without a day to spare to be an assistant Manager at a hiking camp (Cold River Camp) in the White Mountains of New Hampshire for two weeks, returned to SAL for a number of months.

I currently write to you in a cabin lit by firelight again as assistant Manager of Cold River. In a month I leave for Norway to start my Public Health research as a Fulbright Scholar.

Reflecting on my travels it seems like an improbable feat, I’ve been many places and jumped from one experience straight into another, in a word tumultuous. I flew through 8 airports, drank water from the snowfields of the Olympic Mountains, stuck my feet in the sand of both the Pacific and Atlantic shores, faced off with mountain goats and wrote a Fulbright application in a tent without a floor.

I received notice of being accepted to Brown, Boston University and Tufts Medical School for Masters in Public Health and have been granted status as a Fulbright Scholar.

I currently consider myself the most fortunate man alive.

These experiences have allowed me to meet a number of fantastic people, see the natural beauty our nation has to offer, do research and save for graduate school. For a first year out from college, it’s been an exciting adventure.

What was your biggest challenge and how did you overcome it?

The greatest challenge that I faced in my year out from college was, I think, a universal one. Namely, the transition to a different way of life, from student to a fully matriculated adult. Being at university brings the stress of trying to succeed in the structure set out by others.

By graduating, it’s now on you to both create structure and succeed within it. This transition, for me was really hammered home by the process of securing jobs and organizing a path that leads to where I want to go.

Overcoming the transition for me was really a process of persistence and deliberation. To apply to competitive grants and jobs is difficult. Specifically because you know that it’s possible that some or all of it won’t pan out as planned.

The silver lining is that eventually something WILL WORK and the only path to success is to keep on trying.

What did you learn from this experience?

The most valuable lesson I’ve learned is that finding confidence equal to ones ability is really the true test of becoming an adult. Sometimes I feel like I’m just a kid from a small town doing his own thing.

However, in the end of the day I’ve gained knowledge from my experiences/mentors and I can navigate a world of problems, it I put myself up to the task.

If you could go back in time, what advice would you give to yourself as you prepared to graduate from UVM?

Simply put I would say plan for the future and enjoy the present, don’t put one of those two in higher priority than the other. After all it is possible to do both.

What are you doing now and what are you looking to do next?

As mentioned above, I’m currently working as a manager at a hiking camp in the wilds of the White Mountains. It’s the place that I love most in the world and it’s fortunate in the extreme that I get to enjoy the solitude of the woods and streams before venturing off into the bustle of Oslo.

I’ll be off to do my Fulbright Research in August. After that I’ll either be off to Graduate school or maybe another research grant if I’m lucky!