Wednesday, March 25, 2009

Tax Refund Advice and More

Recently, through Twitter @marieclaire, I was asked to provide an answer to a series of questions that had been asked of Marie Claire's Career & Money Expert. One of my answers was selected and can be found online, on the Career & Money blog. Because of space allocation, my answer had to be edited, so I thought I would pass on my full answer to the question, plus my answer to all the other sample questions that was sent. Enjoy!

1. I get stuck when I’m asked what my biggest weakness is at job interviews. How do I answer the question in a way that's honest but doesn't make me look bad? [Is there a best answer for this, or something you should absolutely never say?]

When interviewing for a job, honesty is the best policy, but the trick is to present the truth in a convincing manner. Before you interview for a job, read the job description carefully. Look at the qualifications needed, and then think about your own personal strengths and weaknesses. Are you up for a job in Finance, but don’t use Excel so well? Does your target job require a lot of time management, but you can’t seem to ever straighten your schedule?

Once you can identify your weaknesses, think about how you would go about fixing it. This is crucial to answering the question in a job interview. When your interviewer asks what your greatest weakness is, your answer should be honest but speak to your goal to improve yourself. For example, “My weakness is working with Excel, but I’ve signed up for a training course to help me sharpen my software skills.” Or “Time management has been a sticking point for me in the past, and I have been reading some books on the topic and working with task lists and calendar tools to keep me on track.”

Never answer that you’re a perfectionist or a workaholic. These answers are disingenuous. Everyone has a weakness, and it’s important to the hiring manager to know what yours is. If you have trouble with time management but are a whiz at making presentations, she might pair you in projects with an organizational pro who is shy about speaking in public.

An extra tip: it would be best to prepare a few answers to this question, and gauge the responses of the interviewer as the interview progresses. If she stresses time management as a must-have quality, you might want to go with an answer about software skills instead. The most important thing, though, is to be honest in your answers, and convey that you are self-evaluating and self-improving.

2. I'm job-hunting but haven't been great at keeping in touch with my references. Should I send an e-mail to let them know I'm listing them as references, even if I've used them before? I’m not even sure if they’ll remember me! What do I write?

Everyone has had that moment: you’re searching for references and you find an ideal name in your Rolodex, only to realize you haven’t spoken to her in a year. What to do?

First, think about how you used to be in contact. Did you see this person at professional lunches? Did you email with her on a list-serv? Or maybe this is a former coworker. Whatever the case, you should try and reconnect in a similar style to your previous meetings. Call your coworker, or attend a luncheon you know your contact will be at. If you are an email person, send an actual email, do not use a social networking site such as LinkedIn or Facebook to send a message. The contact should come directly from you, to let her know you are looking to reconnect.
Next, think about what to say. Most people are usually happy to reconnect and provide a referral for colleagues, even after time has passed. But you don’t want to come right out and say you’re only contacting them for a reference. Here are some points you will want to touch on. Ask how your colleague is doing: Does she have a new job? Promotion? Ask her about her career first. Mention your last meeting. Cement the connection by talking about the last time you saw her, and remark on something you did together.

Once you’ve done this, you can either mention your job search, or ask for an in-person meeting, such as coffee or lunch, and ask for a referral there. Don’t be pushy about this, make sure that you are really interested in reconnecting with this person. And when you do ask for the referral, make sure you have something to offer in return, such as a client lead or relevant industry information that could be helpful. And of course remind your connection that you are available to give referrals for her. Or ask her if there is anything she needs—maybe she’s trying to find a good administrative assistant and you know the perfect candidate.

By taking this approach, you’ve not only gotten a referral, but you’ve reconnected with a colleague. Building relationships is crucial, particularly in this day and age when the job market is so volatile. Remember to send a handwritten thank you note to your colleague whether or not your get the job; she did you an important service, and you need to thank her properly.

3. What's the smartest way to spend my tax refund?

Tax refund season is upon on! It can be tempting to take your check and spend it on that amazing pair of heels that you’ve been dying for, but before you indulge your inner fashionista, take a look at your financial situation first.

Do you have overdue bills? Credit card debt? Student loans? These obligations should take top priority. Any of these items can take a toll on your credit score, and paying them off will only help you. Make a list of your bills, including utilities, mortgage, and credit cards, and take a close look. Bills that are overdue should be paid first. On a spreadsheet or a pad of paper, write the amount of your refund, and then subtract the amounts of any overdue bills. Next, look at your credit cards. Credit scores are heavily influenced by the proportion of available credit you have used up, so look at those that are closest to the maximum limit. Do you have a card with a $1,000 credit limit that you have spend $700 of? That’s a 70% debt rate, which can look very bad on a credit report. Ideally, you shouldn’t use more than 30% of your overall available credit. Add up the total you have available on all of your credit cards, and how much you’ve used. Divide the total limit by total used, and that will give you your personal debt rate.

Once you’ve determined your debt rate, be smart about where you pay down your debt. If you have a lot of credit cards, think about paying one off. Top choices for payoff cards are cards with high APRs (store credit cards are usually high on this list), and cards that are close to the maximum. Plan out the payments you want to make, and subtract this figure from the refund amount as well.

After bills and credit cards, the next smart thing to do with your money is save some of it. There are a few options for saving which can include your regular savings account, an IRA, or a high yield savings account. If you have an IRA already, consider putting some of your refund aside from retirement. Remember, the earlier you start saving for retirement, the more you will have when you retire. If you don’t have an IRA, visit your local bank branch and ask about IRA options. Don’t be hasty in selecting a retirement plan; shop around and mention to each bank you visit that they are not the only option that you are considering. A high-yield savings account can be a great option, and you can find great rates at banks such as ING, HBSC, and E*Trade. Deduct the amount you put into savings from the refund amount.

The last thing you should spend your check on is a self-investment. If you own your own home, consider doing some home improvement, like purchasing new leak-proof windows to save on heating and air conditioning. If you drive a lot, take your car to the mechanic’s and have it given new brakes, shocks, or have the engine cleaned. Or think about your work wardrobe—take your suits to a good tailor and have them altered for a custom fit. Quality tailoring lasts a long time.

Once you’ve invested in cutting back debt, retirement, and yourself, then feel free to splurge on something fun, like those heels.

4. My friend asked me to pass along her resume to one of my contacts. She's qualified, but I don't think she has the best work ethic. Do I pass it along, or will it reflect poorly on me if she gets hired and drops the ball?

This is a very complication problem. There are multiple stakeholders involved in the situation: your friend, your network, and your reputation. You don’t want to damage your relationships with your friend or your contact, so think carefully about the situation.

First think about the job your friend is applying for. You say she’s qualified, but is she really? Qualifications are not just about the technical skills and experience; they are also about the soft skills, like work ethic. Has she done a job like this before? Is it a stretch position? Put yourself in the hiring manager’s shoes: would you hire her for the job?

Next think about the contact who would be getting the resume. Is she the hiring manger? Would she be passing the resume to the hiring manager? Does she know your friend at all?

Then examine the ramifications of your friend being hired. If she does a great job, you would get the kudos of having referred an excellent employee. This would be a great point in your relationship with your friend. But if she drops the ball, as you say, how would this play out for you? Your friend might still be happy that you helped her land the job. But you may have alienated a contact—would you value the opinion of someone who sent you a bad hire?

What you can do in this case is pass on the resume without a recommendation. Send the resume to your contact and say, “My friend is interested in a position at your firm, and asked me to send on her resume. Would you mind taking a look at it?” This puts the ball in your contact’s court, and takes some of the pressure off of you. If your colleague asks, “This is a project based job, how is her time management?” you should give an honest answer, but avoid bad-mouthing your friend. Try saying, “She’s not always the most organized person, but she’s very interested in the position.” Convey something positive about your friend, because no one wants to know you as someone who denigrates her friends. If this is a close contact, like a mentor, you can open up a little and perhaps say, “I think this job might be a stretch for her, but I would appreciate it if you could just consider her resume for the first round.” Don’t push too hard, you don’t want to strain your relationship.

When you see your friend, you should tell her you did pass on her resume. If she asks you what your contact said, feel free to answer “She said she would put your resume in the consideration pool.” You don’t have to elaborate. Keep things short and simple.

As for whether your friend gets hired or not, that’s up to her. She will have to interview for the position, if the firm calls her, and she will have to convince them that she is a hard-working employee. There’s no guarantee they will hire her, after all. What might happen is she might list you as a reference. A reference is confidential, and so if you are called for one, tell the truth, and say that you don’t think your friend has the best work ethic. Cite an example to back up what you say. Confidentiality will mean that your friend won’t know that you didn’t recommend her. Being honest will make you more reliable within your network.

You have a duty to your friendship to pass on the resume, but a duty to your contact to tell the truth about your friend. Be careful about your evaluation of your friend; don’t exaggerate about her abilities one way or the other. And you can always decline to pass on the resume in the first place, by saying, “Anne isn’t a very close contact, I wouldn’t feel comfortable passing on your resume to her.” A true friend would understand, and not pressure you.

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