Make Your Paperwork Work for You

(This is a guest article by Melanie Taylor*)

Who says paperwork isn’t fun? What could be more fun than producing conclusive evidence that proves that YOU are 100% right? It’s all the more satisfying when being right means you’re saving money.

Blazing a paper trail...

Our lives are full of paperwork. Master it and you’ll find your finances run more smoothly. Let’s look at three of the most important paperwork categories…

Category One – Receipts

How many times have you had a ‘guaranteed’ product break within months of buying it?

One thing’s always guaranteed: the shop will be festooned with ‘No receipt, no returns’ signs, carefully placed within convenient finger-tapping range of the employee(s) you’re haggling with.

Argue, plead, point out that no other shop within 1,000 miles even sells that product – it all makes no difference in the face of that simple four-word logic. More frustrating yet, even manufacturers’ warranties can require proof of purchase!

If only you’d kept the receipt, you could be turning that broken product into cash, not trash.

Action: Never throw away receipts. Keep them in a dedicated drawer / folder, under whatever kind of filing system helps you locate them at need.

Category Two – Bank (and Credit Card) Statements

In this golden age of technology, it’s tempting to assume that all orders will be obeyed, all payments paid, all transactions transacted – on time and to n decimal places.

Yet banks, like all companies, are run by humans, inevitably the source of all human errors. Whatever instructions you’ve issued – whether by phone, online, or in person – there’ll always be a human involved somewhere down the line. It could be the person who takes your phone call, the ‘techie’ overseeing the online database, or the cashier who ferries your requests to the bank’s system.

This isn’t a criticism of banks. It’s an acknowledgement that human error is as ubiquitous as humans. However impressive the security checks, no organization anywhere on the planet can guarantee 100% safety.

Then there are the technical errors, computer errors, software errors... Whatever label they come with, they can all result in problems with your payments: problems which can affect your credit rating, saddle you with fines for late payment, and potentially land you in debt that you are responsible for clearing.

Which is why you should take the time to check your bank (and credit card) statements. Not just to look for hints that you’re the victim of fraud, but to make sure your planned transactions have been carried out on time and in full.

Action: Check your statements, then file them in date order, so you can refer back to specific instances whenever necessary.

Category Three – Letters

Disagreements can be terrible things, however trivial the subject matter. When it comes to finance, verbal agreements are often described as being ‘worth the paper they’re written on’.

So when you agree something with a creditor / debtor / customer / supplier, get them to put it in writing. When it arrives, keep it. Scan it, file it – do whatever makes it easy for you to find it quickly.

Nothing settles an argument quicker than: “In your letter, dated May 5th, you state – and I quote…”

Similarly, keep copies of everything you send them. If you think it’s necessary, send it registered, and keep the receipt stapled to the copy.

Action: Keep – and file – copies of everything.

A Final Thought

Like it or not, we live in bureaucratic times. Paperwork is everywhere, so learning to deal with it effectively is an important part of modern life.

The better you do that, the more you’ll save on three of the most valuable commodities in your life – time, money, and patience.

*About the author: This article was contributed by Melanie Taylor of Think Money, who provide debt help & advice.

*Image Credit: Photograph by lejoe [via Flickr Creative Commons]

Vanishing Act of the Thin Line between "Want" and "Need"...

Our little baby girl is here! She is such an angel! We are getting settled in and things are beginning to fall in place. Knock on wood. I have a lot of help and support from my family and the "better half" has shown that he truly deserves that name :) But still, somehow, there seems to be no time for anything else, other than learning to be parents! Posting on this blog is going to continue to be pretty sparse, unless I have some guest posts to publish.

A quick note on the personal finance front - it seems to me like the thin line between "want" and "need" has started pulling a vanishing act on us. For instance, we have a very good crib (for upstairs) and a pack 'n play which acts as a bassinet (for downstairs). But within the first two days of bringing our baby home, we ran out to get a co-sleeper so we can put her on the bed with us. She would neither sleep in the crib nor the bassinet and I don't know what made us think the co-sleeper would work... To cut a long story short, now in addition to the crib and bassinet, we have a co-sleeper that she won't sleep in.

There are so many other things we have done this with! Her grand parents have got her a tonne of newborn clothes and we had gone and bought a few too. Within a few days of bringing her home though, we realized that the most convenient clothes were ones that did not have to be slipped over her head and did not have zippers or lace etc. So we ran out and got more sets of the one type of outfit that we like, while the rest of the clothes are just sitting in the closet, waiting for her to outgrow them.

We have gone from a household of two part-time residents (we did spend a lot of time at the office!!!) to a household of five full-time residents (at least until the better half returned to work), and the cost of everything from utilities to groceries has more than tripled! I was expecting the costs to increase (though not as much!) and have a buffer for it. What is completely unexpected though is this sudden inability to distinguish between what we really need and the sleep-deprivation induced urge to buy stuff with the hopes that they will magically make things smoother! Oh well, it ain't everyday that you have a precious little baby, so roll with it the way it goes for the next few months (years?) I guess...

Eight Questions about 529 Accounts for Jonah Keegan, the Founder of Freshman Fund

These days, whenever I get some time, I have been thinking and reading about 529 plans and trying to determine if we should have one for our baby. Coincidentally, I was recently contacted by Jonah Keegan about an interview to introduce his site Freshman Fund to the readers of this blog. Since its a good chance for me to get some of my questions answered, I quickly took up the offer! I hope some of these questions and answers will be helpful to you readers as well. If you have more questions, I have added the contact information for Jonah at the bottom of the interview - please feel free to contact him directly.

Jonah Keegan is the founder of Freshman Fund. Freshman Fund helps parents save for college by giving them a free online gift registry for their college fund. When you register your 529 college savings plan at Freshman Fund, gifts from friends and family go directly into the plan.

OK. Here we go...

ISPF: With so many different 529 accounts available, how can one determine which plan is the best for them?

Jonah: Like Smokey and the Miracles say, "You Gotta Shop Around." The best 529 is going to be different for each family depending on their child's age, their investment pattern and other factors. Similar to big-ticket purchases like a computer or television, you will find that there are a large number of plans that fit your basic needs, and from there it's a matter of doing some research or working with your financial advisor to determine the best choice for your family.

The good news is that if you do want to enroll in a 529 directly, there are some great online tools for comparison-shopping.

The number-one industry expert is Joe Hurley, and his site SavingForCollege.com has great features that let you look at the plans available in your state, run comparisons on different plans or plan features, and see what he thinks are the current top-rated plans.

ISPF: How can parents pass word to relatives and friends that they would prefer to receive the gifts in the form of contribution to the 529 accounts?

Freshman Fund makes this easy in two ways.

First, we have a contacts manager that lets you import your webmail or social network address book. This makes it easy to build and manage messages on our site, as well as discover if anyone in your address book is already using Freshman Fund.

Second, we've included a notification message that you can send right from your Freshman Fund account. Login, and you will see a "Notifed" link next to your student. Clicking the link takes you to our notifications page (Tip: Import your contacts first and adding message recipients is as easy as clicking on their names, right from your message page). We provide a default message, but you can customize it however you like before you send.

ISPF: What are the limits on how much can be saved in a 529 account each year? How do contributions from friends and family effect this?

The limit on 529 savings for each student is set by the IRS gift tax exclusion limit, currently $12,000. This is a limit per student and not per donor, so parents who save or receive gifts at or near this amount need to keep an eye on their annual savings. Also, this is not a per plan limit, so if a student has multiple 529s in their name, they will also need to keep track of their account balances.

In part, this is one of the problems we started Freshman Fund to solve. Parents were telling us that between grandparents, godparents and themselves, they had multiple 529s open for their children and no idea how much money was actually being saved each year. Freshman Fund lets parents consolidate 529 savings to a single account to better plan for the future (and avoid a visit from the tax man!).

Oh, and most plans have a maximum contribution limit as well, it varies from plan to plan, but on average it's more than $250,000 per account.


ISPF: How does a 529 account affect a child's federal financial aid?

The impact of a 529 on a student's financial aid depends on who owns the plan (the beneficiary of a 529 is always the student, but the owner could be the parents, grandparents or the student themself).

If the 529 is owned by the parent or another non-beneficiary, it is treated as a parental asset, and assessed at a 5.64% rate when calculating financial aid awards.

If the 529 owner and beneficiary are the same, the rate could be as high as 20% for the 2008-09 school year because the funds are treated as a student asset, but starting with the 2009-10 school year, they will be treated as a parental asset whether or not the parent owns the 529, and will be assessed at the 5.64% rate.

Also, 529 distributions are not counted as income for that year, which helps when next year's financial aid eligibility is calculated.

ISPF: What happens if my child does not want to go to college?

Parents with a child who does not attend college can transfer the account to a sibling, grandchild, step-sibling, cousin, niece, nephew or in-law without incurring any taxes or penalties.

Other transfers would be viewed as "non-qualified withdrawals" by the IRS, and the account would be subject to federal (and possibly state) income tax on any account earnings, as well as a 10% federal penalty tax on earnings.

ISPF: What qualifying expenses can be paid with 529 savings without incurring a penalty?

The easy ones are the following: tuition, room & board, any mandatory college fees, books, and a computer (if required).

From there, it varies from plan to plan and state to state, if you have a question about something that is not on the list above, consult with your plan manager or financial advisor.

ISPF: Does investing in a 529 make sense for families who may possibly return to their home country before the children start college?

Much like the question "What's the best 529 for my family?" there is no one answer to this question, families who foresee this scenario in their future should research all of the available college savings options, including 529s, or talk to their financial advisor before making a choice.

I can tell you that 529 savings may be used to pay for many non-U.S. colleges, you can search a list of eligible institutions at http://www.savingforcollege.com/eligible_institutions/, in the STATE: drop-down list, choose Canada for a Canadian college, or Foreign Country for any other international school.

ISPF: What are some alternatives to 529 accounts?

Here are some of the more popular college savings options. Space, time and the limits of my expertise prevent me from including every feature of these savings options, but here are a few highlights.

MUM (Money Under the Mattress... or in a no-interest savings account)
Very rarely a wise choice for any type of savings, and college savings are no exception. Loses ~3% per year at the current rate of inflation, and if it's earmarked for college then you're in even worse luck, as college costs inflate at about twice that rate, or ~6% per year.

U.S. Education Savings Bonds
Savings bonds can have tax benefits at both the federal and state level, but the exact nature of the benefit varies depending on the exact type of bond purchased. Unlike 529 gifts, savings bonds are not covered by the gift exclusion. Also, to qualify for the tax benefit, savings bonds may only be used for tuition and fees, whereas 529 distributions can be used for the broader array of expenses mentioned above. The annual limit on bond purchases is $5,000 per owner per type of bond, or $90,000 over the 18 years of a typical future freshman's life. In contrast, 529 plans have an average lifetime maximum contribution of more than $250,000.

UGMA/UTMA
The Uniform Gift to Minors Act and Uniform Transfer for Minors Act are custodian accounts set up for minors by a donor, usually a parent or guardian. The donor is the custodian of the fund, but the donations are an irrevocable gift and must be used for the benefit of the minor. Further, custodianship terminates when the minor reaches the legal age (18 or 21 depending on the state of residence) and may be spent on whatever the beneficiary desires. As you might expect, UGMA/UTMAs are treated as student assets when making financial aid determinations.

Coverdell Education Savings Accounts (ESA)
An education savings account that is more flexible than an UGMA/UTMA, and unlike 529s, can be used for pre-college education expenses. HOWEVER, the ability to use Coverdell ESAs for pre-college expenses will expire at the end of 2010 unless Congress intervenes to preserve this feature. Two other things to note with Coverdell ESAs is that only $2,000 per year may be saved in a beneficiary's name, regardless of who owns the account or how many accounts exist for the beneficiary, and the government steps that limit down, ultimately to zero, starting with incomes of at least $190,000 per year for couples or $95,000 for single filers.

I would like to thank Jonah for taking the time to answer my questions. If you have any additional questions about Freshman Fund, please feel free to contact Jonah at jonah dot keegan at freshmanfund dot com, or 347-416-6498. Please note that he is not a financial advisor, so while he can provide information, he cannot make recommendations. For specific advice, please consult with a financial advisor or tax professional.

Chasing Money - Is There Ever An End To It?

I chatted with an old friend today after a long time. And while we were talking about our jobs and how our companies fared, he told me that they had recently got a new CEO. And as a matter of conversation, he mentioned that the new CEO was going to be paid something along the lines of 30+ Million dollars in stocks (restricted units, not options!), in addition to 1.2 Million dollars in annual salary and 2.4 Million dollars in annual bonus, to take the job. The numbers were just mind boggling. And this new CEO guy is just 45 years old!!! As most conversations with old friends go, we were all over the place, and before we knew it we were debating about whether we would even want to be in the shoes of this guy.

On the one hand, being just 45 and being offered so much money to take on a job seems like an incredible accomplishment. Especially for a guy who was just like us - with a Ph.D. degree and not a fancy schmancy M.B.A degree or someone who wasn't exactly born with a silver spoon in his mouth. How cool is a life with millions of dollars to throw around!!! On the other hand, how much life would this guy have had? He must have worked his butt off to get where he did right? Sure, luck and timing and being at the right place at the right time had something to do with it.... but unless he burnt a lot of midnight oil and stressed out enough to turn several hair gray, I doubt he could have got where he is today. When you are busy building such a high profile career, where is the time for the simpler things in life? To smell the roses, to attend your children's plays and recitals, to cook a meal with your spouse and enjoy it on the back porch? What good is several million dollars, if you don't have time to enjoy spending it? We consoled ourselves that our average Joe jobs that paid decent salaries while allowing us time with our families was good enough.

After I hung up the call though, I couldn't stop thinking about this. Are we really that different from this CEO guy, other than the fact that we don't make a multi-million dollar salary per year (that's a big glaring difference, but lets ignore that for a second, shall we?). Let me take my example. I am currently *very* pregnant but I still continue to go to work, so I can save all my PTO for the time after the baby comes. Even with all this saved vacation and the short term disability pay, I will have only about 9 weeks of time off with my new baby. And then I need to make a choice - either go on unpaid leave or return to work. And I am not very open to the idea of going on unpaid leave for long periods of time :(

Now, do we *need* the pay I will get by foregoing those few weeks of unpaid leave? Well, not really. The better half makes a decent salary, and we have some money in both short and long-term savings and we can survive fine without my paycheck for several weeks, months or maybe even years. So, why am I so reluctant to forego a few weeks of salary? Ultimately, are we all addicted to money so much, that we cannot stop chasing it? Do we all just trade in our time blindly in the pursuit of money? In some cases like that of the CEO guy its millions, and in other cases like me it is a few thousands but is it the same thing? Do we all intentionally (or out of habit) just chase financial security at the cost of quality family time?

I don't think I am cut out to be a stay at home mom. I admire those that have made the brave decision to give up their careers to raise families. But a large majority of my friends and the people I know are like me - they have reluctantly got back to work after having babies. They spend the days from morning to late night switching roles - an ideal employee to an ideal mom to an ideal spouse. Trying to advance the career and bring in a bigger paycheck, while at the same time trying to be a good mother and wife and provide a good nurturing family. Balancing, juggling, being super women....

What is it that fuels this insane desire to chase money? Is there ever an end to it? Do any of you ever wonder, or is it just my pregnancy hormones talking? :)

*Image Credit: Photograph by David M* [via Flickr Creative Commons]

PS:This article was featured as an Editor's Picks in the Carnival of Personal Finance #165 over at No Debt Plan. Head on over there for some really good reading...

Don’t Go Down with the Economy!

(This is a guest article by Melanie Taylor*)

It’s hard to open a news site or newspaper without hearing more about the economic woes besetting the world in general and the States in particular. From credit crunch to housing crisis, it seems like everything that could go wrong now officially has. It’s no wonder the airwaves are full of heated debates disputing the meaning of the ‘R’ word, and whether or not we can officially use it (yet).

A recession might not be ‘real’ until we’ve seen two consecutive quarters of decline in real GDP, yet plenty of individuals started suffering long before the economy as a whole. Regardless of the nation’s communal health, the real question is this: “What’s my financial situation – and how can I improve it?”

There’s always something you can do (basically earn more & spend less) to improve your finances, and it’s always a good idea.

At a time like this, it’s simply more important.

Rule 1: Use it wisely
You may be tired of hearing the word ‘budget’, but money management is more important than ever during times of economic uncertainty. So figure out your income and expenditure. Spend a month writing down everything you spend. This can deliver three benefits – practical, psychological and motivational.

• Practical. Everyone wastes some money – it’s just a question of how and how much. Pinpoint where you’re wasting money and you’ll know what to do.


• Psychological. Doing ‘the wrong thing’ is always harder when someone’s watching, even if it’s only yourself. If you find that ‘self-auditing’ helps keep you on the straight and narrow, keep it up – when your debts are paid off and today’s problems are a distant memory, this could be the key to saving for retirement.


• Motivational. Calculate how much you could save in three months, or in a year – there’s nothing like multiple zeroes to inspire an economy drive...

Now use that calculation to figure out how much faster you’ll be able to pay off your debt, and how much interest you’ll be saving. The sooner you clear your debts, the sooner your money will be your money again, to spend or invest as you see fit.

Rule 2: Don’t panic
Trading down – either property or cars – can be a good idea and save you a fortune in the long run. Just make sure you don’t:

• Overreact. Don’t sell your $250,000 house because you need $5,000.


• Mistime your reaction. Don’t, for example:
  
  • sell property during a property crash – there may be alternatives, such as renting it out and moving into a smaller property yourself.
  
  
  • sell shares when they’re down – if they’re worth $500 now and might be worth either $0 or $5,000 in a year or two, isn’t a $4,500 profit worth risking a $500 loss?

Rule 3: Careful what you borrow – and how
There’s nothing wrong with debt per se. ‘Healthy’ debts can more than pay for themselves: your mortgage might be your ticket to property-boom profits, for example, or your car loan might be your only path to a better-paying job.

‘Unhealthy’ debt, on the other hand, can lead to a miserable existence that’s the exact opposite of the picture painted by adverts of smiling people waving credit cards at shop clerks. As a general rule, credit cards are fine if you use them because they’re convenient – and pay them off a.s.a.p. – but once you start using them to borrow money, you’re running a real risk of entering a ‘debt spiral’.

So if a slowing economy means you’re faced with short-term cash flow issues, remember there are better ways of dealing with them. Just three ideas:

• Talk to your mortgage provider about taking a payment holiday (a short break from making mortgage payments).


• Cut out luxuries altogether until you’re back on track.


• See what you can sell to raise cash.

If you’re just a few dollars short, you may be able to find it elsewhere, without resorting to credit cards.

And if you’re faced with a serious shortfall, then borrowing a lot on your credit cards is almost certain to lead to serious interest charges, especially when lenders are reacting to economic problems by raising interest rates.

Rule 4: If you need debt help, get it!
There’s no shame in asking for help with your debts. If you’re frightened that people will think you’re a fool for being in debt, how much more foolish would it be to let that fear deter you?

The kind of help you need depends on your situation: your existing debts, your current finances and your future earning potential.

• You might just need some advice from a seasoned professional – someone who understands how budgets work, how lenders think, how repayment plans are calculated…


• Or you might need a professional debt solution. Talk to a professional who understands the various solutions available and can advise you on which one would be best for you. Make sure you find a company that offers a range of solutions so you won’t feel they’re pushing you down a path that isn’t appropriate.

Rule 5: Remember you’re an individual
Finally, remember you’re not the USA. Your finances and the country’s are not inextricably linked.

A few tips.

• Threats: prepare for the worst


• Do whatever you can to stand out at work – take night classes, volunteer for special assignments, do overtime...


• Cut your spending to an absolute minimum and save – if you do lose your job, you’ll need this safety net.


• Read the papers. If your company’s in trouble, don’t be the last to know.


• Keep your eyes open for alternative employment, whether you’re just establishing a Plan B or convinced that your job / company is doomed. Just don’t forget the ‘last in, first out’ rule – unless you’re confident about the new company’s future (and your own in it), making yourself the ‘last in’ could be a terrible move.


• Opportunities: hope for the best


• Think about moving into a ‘recession-proof’ industry that does well in troubled times (food, for example, medical services, energy provision or debt collection)


• If you’re in business, be prepared to seize the market share that’s freed up when competitors go out of business.


• If you have a bit to invest, keep an eye out for shares that have come down in price because of today’s troubles. If a big company’s shares have fallen from $5 to 50c, there’s a good chance they’ll be back at $5 in the not-too-distant future. It might be best to spread your bets – rather than buying $2,000 of share in one company, buy $200 in ten companies.


• If you have a lot to invest, do your homework and look out for cheap property.

Just as some people suffer more than average from a (potential) recession, others suffer a great deal less. Plenty of people buck the trend altogether and do as well as usual – or better. There’s a lot of luck involved, but there’s also a lot of skill…

*About the author: This article was contributed by Melanie Taylor, of GregoryPennington.com, a debt management specialist.


*Image Credit: Photograph by lemonjenny [via Flickr Creative Commons]

Hurdles on the Path to Career Success – Part 2

Last week, in Part 1 of this series we looked at a few hurdles that we create around us that prevent us for being as successful as we can otherwise be. Here is a list of few more gotchas to watch out for.

Being an island
The world today is a much smaller place than yesterday. No matter who you work for – be it for a small firm, a large corporation or for yourself, unless you are willing to go out, network and make contacts, you probably will not be able to succeed on a large scale. It does not mean that you need to go out and have drinks with peers and clients every day of the week. But you do need to make an effort to shed your shyness, leave your comfort zone and venture out of your shell to meet people.

How to fix it: Make some key friends. If you are an extrovert and it comes naturally to you to make contacts, you will likely not have this problem. If you are an introvert, find those few extroverts that you are comfortable with and be friends with them. You don’t have to know everyone – just knowing those one or two people who know everyone will get the job done most of the time!

Not marketing yourself
If you are still naïve enough to believe that if you are good, people will notice you, then it is time to wake up! In a world of cut-throat competition, if you cannot market yourself, you could be in for some serious disappointment. It does not matter whether you work in a research lab or a multi-national corporation – you need to learn to sell yourself.

How to fix it: Practice! If you are from a cultural background where boasting is shunned, recognize that and find ways to make your accomplishments noticed. Learn to speak up, and take credit for what you have done. Make sure that your manager knows how much effort you have put in the project and the small successes you have had. Learn to keep your failures to yourself, unless you have been asked about it, in which case learn to share them in a positive light.

Not being able to take criticism
There is positive criticism and there is negative criticism. And chances are, you will come across both at your work place. Getting defensive and not learning from the criticism is and will always remain one of the biggest down fall of most people.

How to fix it: When you receive positive criticism, thank the person and try to implement the changes suggested. These can help you grow both as a person and an employee. On the other hand, if you receive negative criticism, go ahead and make the necessary changes – you can still learn from these. In addition, work with the person to see if you can help them grow as a person and improve their communication skills. If not, just brush it off as some behavior quirk and move on.

Not keeping up with the latest advances
It seems like every day there is a new, easier and “improved” way of doing things. Sometimes it is exciting. At other times, it could be downright annoying, disruptive or scary. But if you hesitate to embrace the change, then you will soon be replaced by someone else who is not so threatened by it.

How to fix it: Network with the younger generation and stay in touch with what is the latest. Read voraciously, and attend trade shows, conferences etc. Do not hesitate to ask someone for help if you find the technology intimidating. If needed register for classes – either at the company’s learning center, or community college, or online!

Being prejudiced
All of us have our quirks. There are some things that we are not quite comfortable with. But in a world where half the office is in the US and the other in India or China, half the work force is male while the other is female, and the skin color takes on all shades of white, black and everything else in between, unless you learn to overcome your prejudice, you will have trouble adjusting to your career.

How to fix it: Look deep into yourself to find out what caused the prejudice. Maybe it was a dinner table discussion between your grand father and your parents that instilled the prejudice in you – do you still think it is valid? May be some experience while growing up caused you to start looking down on a particular race – isn’t it time to grow past it? Again, getting to the roots of your prejudice to free yourself will not only help you in your professional life, but personal life as well!

Nobody is perfect, but we can all try to get rid of some of the limitations around ourselves and aim to be better than we are now. I am sure there are a lot more hurdles out there that prevent us for reaching our full potential for success. I would love to hear your views on this. I will write more on this topic in the future weeks.

*Image Credit: Photograph by misspiepie [via Flickr Creative Commons]

Hurdles on the Path to Career Success – Part 1

All of us have inside us the potential to succeed. To go above and beyond the average. But over a period of time, consciously or not, we end up creating hurdles around us that block us from being as successful as we can otherwise be. This is true both in the career, and life itself. Here is a quick look at some of the common hurdles in the path to career success.

(What has this got to do with personal finance, you ask? Well simple. The personal finance equation has two parts to it - how much you make and how much you keep. And needless to say your career success has a huge impact on how much you make. So there you go. Now, lets move on to the focus of the article - the hurdles on the path to career success)

Trying to please everyone
Remember the old adage “He who tries to please all pleases none”? This is particularly true at work. If you try to please your colleagues, boss and subordinates all at the same time, eventually you end up not pleasing anyone. Worst of all, you could end up with a particular sense of dissatisfaction that can ruin your peace of mind.

How to fix it: Prioritize! The first and the most important person is of course yourself. You need to be happy and content with what you do. Next, it should be the boss/manager who is responsible for your career progress. Next, is your subordinates. Finally, your friends and colleagues.

Not clearly understanding the expectations
If you do not communicate well with your manager and your peers, your understanding of what needs to be done, and theirs can be very different. Even if you put in a lot of hard work, if you are working against a wrong set of requirements, eventually none of it matters.

How to fix it: Listen! And then repeat. It may sound silly – but a simple repetition of what the expectations are can clear up the understanding. Make the following sentences part of your discussion with your manager and peers: “Let me see if I got it straight – you want me to…”; “OK, so here is my understanding. Please let me know if this is correct…”; “Based on what you just said, here’s the list of things I need to get done…”. If you are a manager, encourage your subordinates to summarize your discussions and listen carefully for any misunderstandings.

Too focused on job security
Last year my company laid off a little over 7% of the job force. There is nothing unique or strange about that number. For many of us that work in the tech sector, lay off is a part of life. Unfortunately, some of use adjust to this fact better than others. If you are worried to take risks and speak up because you are too focused on the job security, then you could be seriously curtailing your own growth – both professionally and personally.

How to fix it: Prepare! Have a list of other companies that you can work for if you get laid off. Keep your resume updated. Have an emergency fund and maybe some sources of alternate income. Once you are prepared to face a lay off, you will stop worrying about it and be willing to take on more challenges at work.

Letting personal life influence work life
Everybody has issues in personal life at some point or the other. There isn’t one of us that has a perfect hassle free life out of work. There are ups and there are downs. If you let it effect the quality of work, then eventually your career will come tumbling down.

How to fix it: Practice professionalism. Learn to mask your emotions at work. In fact, take it one step further – when you feel utterly dejected in personal life, make sure you find ways to achieve success in your work life! When you can make your work complement your personal life and offset the downs, you will succeed not just in your career but also in your personal life!

Short-term thinking
Last year I was assigned to a project which I was not too keen on doing. The work was boring and I thought it did not use my “potential” well. Needless to say I was quite disappointed and not very motivated. One of the days when I was stuck in traffic, I was thinking about this, and realized it was not all bad. The project is has high visibility, so if I did a good job, I can get some recognition. In addition, there is no defined team lead – and I could easily step into the role and take on more responsibility. The more I thought about it, the more it seemed like this project was far better in the long term than the project I had coveted and was hoping to be a part of.

How to fix it: Step outside and think long term. How will what you are doing now help you 2 years down the line? 5 years down the line? What are you learning now that will prepare you for success in the long run – not the promotion next year, but in the next job that you accept in some other company? And the one after that? If you get into the habit of questioning the long term implications of your every day actions, you can escape the myopic stand that most average people end up taking.

These are by no means the only hurdles that stop us from being successful in our careers. But if you do identify any of these as part of your life, work to improve. All of us are mere humans and susceptible to flaws. The real tragedy is if we do not identify these flaws and try to fix them! I will post part 2 of this article soon.

*Image Credit: Photograph by Stew pendous [via Flickr Creative Commons]