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The option to work from home has been shown to benefit employees and employers. This type of flexibility in working arrangements, when appropriate based on the employee’s responsibilities, increased productivity and retention for the employer and job satisfaction for the employee. The same benefits apply to working arrangements that include flexible hours.

As Margaret Heffernan explains in INC Magazine, “Treating employees like grown-ups made it more likely that they would behave the same way.” This treatment includes trust; if you hire the right people, you can trust them to accomplish their tasks and goals on time and under budget without worrying about the time they walk into their cubicle and the time they leave.

ClockIt’s difficult to treat employees like adults, however. At one of my corporate jobs, I joined a team some time after the management hired an efficiency consultant. The consultant sat with each employee and monitored and logged every minute of each employee’s work day in order to determine opportunities for improvement in productivity. After the study, productivity might have increased, but it most likely didn’t last long. Employees resented the requirement of tracking every minute of their days.

Around the same time, one of the supervisors made a habit of walking the floor at nine o’clock in the morning to see who was at their desk on time every day. This type of micro-management benefited the supervisor, and perhaps it gave her a feeling of control, but the employees resented the approach, even if they were at their desks on time each morning. Even when arriving on time, the employees would need to be at their desks at the moment the supervisor walked by rather than in the rest room or the kitchen area.

Thankfully, this supervisor was no longer with the team by the time I accepted my position.

A policy that includes flexible hours gives employees ownership of their roles and allows them to make decisions about the best time to do their jobs. The right people can handle these decisions without taking advantage of the employer or the flexible policies.

A flexible working hours arrangement can take a variety of forms:

  • forty hours every week spread over four days instead of five
  • eighty hours every two weeks spread over nine days instead of ten
  • eight hours every day starting earlier or later than nine o’clock

This type of flexible working arrangement may increase productivity. Happy employees tend to be better employees, and they stick with the company longer. Long-term loyalty to a company has decreased over the years due to many changes in the relationship between employers and employees, but a policy involving flexible hours and other benefits can help reverse that trend.

Work/life balance isn’t always appropriate. I am always torn with this concept, because different goals require different treatment. When I worked for a small non-profit organization whose lofty goals were difficult to achieve on a tiny budget and a lack of resources, the expectation was to put our lives into our work. The only way to achieve greatness is to be completely dedicated to the mission, and that required making many personal sacrifices. Most jobs and careers do not work in this fashion, but in any career, this type of dedication can lead to success.

Work/life balance is a great approach for the cast majority of the American workforce that recognizes that life outside of work is important, but those whose personal mission is to become the best in the world at their job, life is just a distraction.

As a business owner without any employees, I took advantage of flexible hours. When I left my corporate job over a year ago, I experimented with creating a regular schedule for myself, but I determined — and this was something I had known since I was a teenager — that I just work better and more efficiently when I have the flexibility to work when I like.

Do you have flexible working hours at your job? Is it beneficial or detrimental to your group? If you work flexible hours, have you seen any personal benefits?

INC Magazine, American Psychological Association, Forbes

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Not every credit card on the market today is out to provide consumers with great rewards, because not every card customer can make the most of those rewards. Credit cards are just tools, and depending on who is wielding them, they could have a positive or a negative effect on that person’s finances. Some people just use credit cards to habitually buy what they can’t afford. For them, a great rewards credit card might actually be counterproductive.

A good example would be someone who has made mistakes with credit cards in the past and is now looking for some way to get out of the debt hole. Rather than trying to rack up rewards with spending, this individual would be better off finding a low-interest card or a card with an excellent introductory APR on balance transfers that will allow him to save money while reducing his debt.

Chase (JPMorgan Chase & Co.) Issuers design some cards for people looking to save money on costly interest payments. Slate® from Chase – No Balance Transfer Fee has offers a 0% introductory APR on purchases and balance transfers for 15 months. This offer is for applicants with good or excellent credit; after the 15-month introductory period, the APR is 11.99% to 21.99% variable. Notably, Slate from Chase – No Balance Transfer Fee does what the offer says: It allows you to transfer a balance to the card with zero fees if you do the transfer within the first 30 days your account is open. (After the 30 days, balance transfers are assessed a fee of $5 or 3% of the balance transferred, whichever is higher.) Combined with the 0% APR period for purchases and balance transfers, this is a card that will likely save you money if you carry a balance and are committed to paying it down within 15 months. The Slate® from Chase – No Balance Transfer Fee card has no annual fee.

Slate from Chase includes a program that’s meant to help cardholders analyze and pay down their debt. The program is called “Blueprint,” and it allows cardholders to pick which purchases to pay off first. With Blueprint, customers have the option of designing their own plan:

  1. Full Pay. Avoid paying interest by paying off full categories of your choice. Chase will separate all of your purchases into different categories.
  2. Split. Inform Chase how much you want to pay and to what purchases you would like it applied to.
  3. Finish It. Set up a goal and a timeline and Chase will calculate your monthly payment schedule for you.
  4. Track It. Check out your spending trends and see where you stand with any goals you’ve set up.

It seems like a lot of work, and most people will probably prefer to just send a payment into a credit card and have it apply to the highest APR balance regardless of what the original purchase was. Psychologically, however, there is value in understanding exactly when a particular purchase has been paid off. That theory has been used to great effect by Dave Ramsey with the Debt Snowball, and this is sort of a similar application.

That’s about all there is to the Slate from Chase. For consumers looking for a great introductory rate with features to help you keep your debt in check, this card fits the bill. Remember to keep in mind that the best offer is given to excellent credit applicants only, so anyone with average or even above average credit should avoid applying. Here’s how to apply for the card.

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People who borrow money generally understand that they will eventually need to pay borrowed money back to the lender. This understanding, whether codified in a contract or not in any particular case, makes lending and borrowing money work as an economic mechanism. It’s interesting that regardless of what’s written in a contract, most debt can be legally ignored. Borrowers may feel bound by their pride to honor commitments, but every state in the country has laws that prevent lenders from chasing after deadbeat borrowers after a certain amount of time.

Time-barred debts are subject to a statute of limitations. After a certain amount of time passes with a borrower unable or unwilling to pay back a loan, the lender will no longer be able to sue the borrower for uncollected debt. The lender can still contact the borrower and try to convince him or her to pay back the loan, but the lender’s legal rights to the funds are limited.

This doesn’t mean that it’s a good idea to wait for the statute of limitations to pass on all your debt in order to avoid your obligations. There are consequences if you don’t pay back debt. Most importantly, the three credit reporting bureaus will significantly decrease your credit score, and it could take a long time for that number to return to normal. This will affect your ability to qualify for more loans, mortgages, and credit cards in the future.

This is a dilemma many homeowners have considered recently; with the market value of houses sharply decreasing in the last few years, and the resulting financial reality of owing the bank more on the mortgage than the house is worth, some in this situation have considered walking away from the house and mortgage. In some cases, this could be a tactic that is more financially responsible than continuing to sink money every month into a depreciating asset. Families considering this option have to weigh the consequences, including not being able to qualify for a mortgage again for many years, against the emotion-based drive to honor financial commitments.

Although lenders are legally barred from suing borrowers after the statute of limitations for a particular debt has passed, they might still try. If you’re able to show a judge that the debt is time-barred and no longer legally collectible, you have nothing to worry about other than the consequences.

Credit cards and other open accounts like home equity lines of credit, written contracts, oral agreements, and promissory notes may have different statutes of limitations, and each differs by state, as well. Here’s a list by state of time-barred debts.

The clock starts ticking on the statute of limitations from the day you miss your first payment. The moment you send a payment to the lender, no matter how small, the clock resets. For example, if the statute of limitations on credit card debt in your state is seven years, and it’s been six years since you’ve made a payment, you may determine that it makes more financial sense to refuse to make a payment for one more year rather than negotiate with the lender. If you are in financial difficulty and don’t expect to ever be able to pay off the debt, paying even a small amount means you’ll need to wait another seven years after making the small payment before you’ll be legally protected from paying back the debt.

Not all debt is time-barred; student loans backed or issued by the government have no statute of limitations. Anything you borrow under any of the loan programs that qualify in this category can never be ignored. The lenders are often willing to negotiate the terms in order to help you make payments you can afford, but these students loans are, for the most part, legally stuck with borrowers until the lenders are satisfied.

A few questions for discussion:

  • Do you think it’s right that borrowers can avoid agreements by patiently waiting for the statute of limitations to pass?
  • Have you ever been sued for debt you didn’t need to legally pay back?
  • Have you inadvertently restarted the clock by paying a small amount to a lender when it might have been better to wait?
  • Are you dealing with the credit consequences of letting a debt expire?

Note: I am not a lawyer, and nothing written on Consumerism Commentary constitutes legal advice. Always check with an attorney before making any decisions regarding the law.

Photo: Dave Stokes
Federal Trade Commission

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This is an article by Marc Pearlman. Marc is a money management professional who has been in the finance industry over 20 years, and he is the author of The Positive Money Mindset and host of the radio show, Your Money Matters.

I watched as these two were duking it out — at the poker table, that is. Fortunately for me, I was out of the hand with my lousy cards safely in the muck pile. I watched with no attachment to the outcome, but I had a prediction of who would come out the victor in this poker showdown. This young kid, probably mid to late twenties with a black hat pulled half way down his head had been quiet most of my time at the table, was squaring off with a middle aged guy. If appearances mean anything, this middle age guy was somebody of means given the designer clothes he was sporting.

Anyway, this kid makes a modest bet and the middle aged guy is quick to match it. Not only does he match the bet, he raised him with a smirk as though daring this kid to come at him again. So, the kid comes back at him with a bigger bet, and again this guy matches him. When all was said and done, both guys had all their chips in the middle and our middle aged poker wannabe had absolutely nothing for a hand. He tried to save face and belted out, “I didn’t have anything, but I couldn’t sit there and watch you walk away with it.”

Poker chipsEgos can be expensive that way.

All too often people make financial decisions out of emotion, which can be an expensive trap for those who have their ego firmly married to their net worth. If we look around, we can see examples of this all across the spectrum of income classes.

Years ago, I worked with a doctor who shall we say did not suffer from a fragile ego. He was interested in putting money with an institutional money manager who had a large minimum investment requirement and a lousy recent track record. I had suggested a manager who demonstrated better performance numbers and who utilized a strategy with less risk. “What is the minimum investment?” the doctor inquired. The minimum was about half of the other managers requirement, I answered. The doctor quickly rebuffed the notion.

It came out in conversation that his peers had money invested with this manager who had the higher minimum. I understood that it was important for him to be part of what he believed to be a prestigious group of investors. Making money was not his motivation, satisfying his ego is what dictated his investment choice.

Another story comes to mind. I once had the opportunity to work with a professional commodities trader. I was hired to help him with his trading deficiencies. This guy had strong opinions on whatever subject was being discussed. He could not possibly fathom that his thought process could be flawed. I introduced him to the concept that being right to him was more important than making money. He scoffed at the idea. In the end, he learned his lesson in a painful way. This trader would hold onto losing positions until he was forced to sell. He vigorously defended his position that he was right only to watch his once several hundred thousand dollar trading account dwindle to less than $20,000.

Ultimately, the ego he was trying to protect was humbled.

Here is yet another example of how our egos can hurt us financially: about a decade ago I had a wonderful client who has since passed away. Great guy, but wow, what a terrible stock picker! Honestly, someone could have made a fortune by simply doing the opposite of what this guy did. He held fifteen stocks in his portfolio, ten of which I had selected for him.Out of the five he picked, every single one was a dog. When I say dog, I mean dog with fleas. They were all down 70 to 80% within a year. I am not suggesting that every selection I made was a homerun, but we were profitable on average with my ten selections.

He would call in on a regular basis to discuss the market. He never wanted to discuss his losing stock picks. Furthermore, I knew it was taboo to mention my winning stock picks. The only subject that was not off limits was the couple of picks I made that were not working out.

When he passed, he still held those losing positions. His refusal to acknowledge his mistakes cost him well over five figures in losses, not to mention the opportunity costs associated with redeploying the money elsewhere.

Big egos often mix with money with the same cohesiveness that oil and water mix. Having an inflated ego is not necessarily the issue, but when your financial decisions are borne from ego, you are in dangerous territory.

Strong and sound financial decisions require letting go of your ego. Often, we need to admit our analysis was wrong and we need to cut losses in order to preserve our hard earned capital. Sometimes the simple truth is that keeping up with the Joneses is going to bring financial ruin.

Many times, laying down your cards is the best thing you can do for your wallet.

Photo: Ross Elliott

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