How to Explain a Gap in Your Résumé

My first job out of college was with a recruiting firm run by three women who had nearly a hundred combined years of experience in the workforce. They taught me everything I needed to know about how to read resumes, including the warning signs to look for. A gap in employment was, according to them, the kiss of death.

Today, a hot minute and three U.S. presidents later, I truly believe that wisdom is as outdated as my prom dress. It was fine in the moment, but the moment has passed.  

Each of us is complex and unique, and our personal stories should reflect that.

The rules of employment history have changed, and the story you craft about your timeline is yours. Whether your employment gap happened because of a layoff, becoming a caregiver, taking a sabbatical, exploring entrepreneurship, or even just a mental health break, let's talk about how you can own that gap in a way that will want a prospective employer wanting more of you!

1. Lead with transparency

As poet Walt Whitman said, “I am large. I contain multitudes.” Each of us is complex and unique, and our personal stories should reflect that. There are no right or wrong plot points as long as each point is truthful.

When capturing your history (employment and otherwise) on your resume, be honest and transparent. There's no need to flag a gap in employment in bold print, but neither should you try to hide it.

Our journeys are complex and diverse. The trend toward inclusion will only grow in 2021. And beyond diversity in terms of race and gender, I believe companies are ready to lean into a diversity of experiences in the workforce. Companies must look beyond the traditional one-directional career path, and search for talent whose life experience reflects that of their customers.

Beyond diversity in terms of race and gender, I believe companies are ready to lean into a diversity of experiences in the workforce.

So don’t be ashamed of revealing your lived experiences, from caregiving to travel to taking time to pursue a passion. Transparency upfront will help you begin the conversation with a prospective employer on the right foot.

2. Reflect on your gains

Maybe you opted out of the workforce for a year to care for a child or parent or to travel the world. Or perhaps you were laid off in an economic downturn. Whatever your reason and whatever the cause, you were still a person living in the world during this time. Your experience may not have been “work experience,” but this is where life experience gets its time in the sun.

When I spent 2007 at home with my newborn daughter, there were days—many days—that left me feeling like my brain had turned to mush. Baby Beluga had become my theme song and I was spending days calculating ounces of milk digested and … processed. (Yes, I mean poops).

This is where life experience gets its time in the sun.

But as I started gearing up for a job search in 2008, I pushed myself to reflect on the gift of that year. Certainly, it was a privilege just to be with my infant daughter. But it had also given me some new skills and perspective. 

Time management and prioritization become finely tuned when your baby’s naps are suddenly your only windows of productivity. I had become part of a new demographic—parents—which broadened my perspective not only on the world but on any company’s potential customer base.

Oh, and my ability to experience failure but keep on keeping on? That expanded immensely. I screwed up daily with sleep training and sign language and all the mothering things. But I also persisted because I had a new responsibility to manage.

These were some of my reflections. I challenge you to define your own.

Think expansively about how this time has added in any way to the multitudes you contain. It is now a part of your story to shape and own.

Maybe you were laid off during the pandemic. You’re not alone. And remember, you’re leading with transparency. You don’t have to pretend the layoff was some grand gift. You’re allowed to experience disappointment. But shift quickly into considering what you gained during the weeks or months of not being employed.

What have you spent time doing? Being with family? Caring for a loved one? Supporting a working partner? Have you taken any classes? Picked up a new certification? Learned to cook? Think expansively about how this time has added in any way to the multitudes you contain. It is now a part of your story to shape and own.

3. Craft the narrative

So now, armed with insight and reflection, it’s time to craft the story you will proudly tell any prospective employer. This is your chance to package yourself as the most irresistible product on the job market.

I’ve always loved the commencement address Steve Jobs delivered at Stanford back in 2005, during which he said:

You can’t connect the dots looking forward; you can only connect them looking backward.

Steve Jobs

So, as you look back at the totality of your experience—work and life—what is the story you want to tell that makes you the most compelling candidate? How will you choose to connect the dots and help your potential employer see the complete picture?

In 2008, I showed up in interviews not as a new mom hoping desperately for anyone to give me a chance, but as a person with a broad perspective to offer. I still had my pre-baby skills and experiences, but now I could apply a keen ability to prioritize, to think critically about what should command my focus, to learn from failure, and to be successful without having control over a situation.

My conversations with hiring leaders painted this picture of me. I made sure to bring in examples of both work and parenting experience. It made me real and whole. And it ultimately won me a great job.

So, what’s the story you’ll tell? Maybe being laid off taught you that things can change on a dime, which has challenged and enhanced your agility. Maybe you used your time to take classes, brush up on skills, and add a certification. 

Prepare examples of how these insights and added skills will deliver value for your next employer. How lucky they will be to have you!

4. Fake it till you make it

I stand by the logic of everything I’ve said thus far. But there is so much more than logic at play here. There's ego and emotion and anxiety and lots of other messy human things. I’ve lived through, and overcome, all of that. Some days I’m still overcoming it.

Confidence is something that will grow over time. But don’t wait for it; cultivate it.

Are you wondering how I managed to show up with so much confidence after spending a year away from the corporate world? Then let me tell you my secret: It wasn’t confidence at all! It was all my fear and anxiety hidden behind a smile and a firm handshake. (Remember those?)

Confidence is something that will grow over time. But don’t wait for it; cultivate it. For now, if you’re struggling to access confidence, then just play the part. You’ll be amazed at how quickly the real thing will follow.

And there you have it. Yes, whole, complex, messy you. So practice your most confident smile, prepare your firm handshake, brush up your résumé, and get ready to pound the pavement.

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The post The Average Salary of a Pilot appeared first on SmartAsset Blog.

5 Tips for Building a Side Business

You’ve probably noticed that people are embracing entrepreneurship like never before. Due to the widespread availability of technological business tools, there’s never been a better time to become your own boss. With an internet connection and a smart-phone or laptop, you can work from just about anywhere on the planet.

If you’ve been dreaming of quitting your day job to start a business, you might be wondering if taking such a big leap is worth it.

While there’s nothing wrong with holding down a W-2 job and getting a steady paycheck, having income from your own business comes with many upsides. But if you’ve been dreaming of quitting your day job to start a business, you might be wondering if taking such a big leap is worth it.

The good news is that there are incremental ways to become self-employed that are stable and reduce your risk, instead of plunging abruptly into a precarious financial position. In this chapter excerpt from Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers, you’ll learn practical strategies for building a solo business while keeping the security of a regular job.

Tips for building a business on the side

Becoming your own boss may seem glamorous from the outside, but it can have stressful pitfalls, such as little pay, no insurance benefits, and unpredictable clients. However, you can avoid or minimize some of the downsides by maintaining a reliable day job while you grow your solo business.

Having the security of a job and the excitement of becoming a solopreneur gives you lots of upside with much less risk. A steady paycheck may give you the confidence you need to take business risks—such as buying more advertising, equipment, or software—that will make your venture more profitable.

Having the security of a job and the excitement of becoming a solopreneur gives you lots of upside with much less risk.

Aside from maintaining a reliable income stream, being both an employee and an entrepreneur can make you a better worker. In my experience, growing a side business also builds skills and experiences that make you more effective at your regular job. You may even find your side hustle revives an appreciation for your day job. There’s a lot to like about having a salary, benefits, and other perks, after all.

Whether you decide to be both an employee and your own boss for weeks or years, it will take some juggling to manage successfully. Here are five tips to face your career fears responsibly and prepare for the future by adding entrepreneurship to your resume on the side.

Define your vision for success

Before changing your job or making the transition from employee to self-employed solopreneur, take the time to define what you truly want to achieve in your career. Sometimes your ideas about success come from other people, and they can cause you to follow a career path that never truly fulfills you.

Maybe your boss thinks you should regularly work late so you can climb the corporate ladder, or a parent says you should go to graduate school. You might take a lucrative job in a field you’re not crazy about because that’s what your friends are doing. But if that job requires frequent travel when all you truly want is to start a family, care for aging parents, or spend time enjoying where you live, you’ll never be happy.

Never let external markers of success, such as a big paycheck or a fancy job title, become more important than your heartfelt calling and goals for your life.

If you don’t pause periodically to reflect on what success means to you, it becomes easier to follow other people’s priorities when it comes to your work. If your decisions aren’t purposefully leading you toward a life that excites you, you’ll likely wander away from what you genuinely want.

Never let external markers of success, such as a big paycheck or a fancy job title, become more important than your heartfelt calling and goals for your life.

That said, getting in touch with your real desires isn’t always easy, and you might have to listen carefully to hear your inner voice. Try incorporating some quiet time into your daily routine. When you first wake up or when you’re settling down at bedtime, think about what you’re grateful for—but also what you’d like your life to be. Consider your definition of success and any changes you’d like to make to your life in the near and distant future.

Ask yourself the following questions to better understand your values and get clarity on your unique vision for success:

  • What type of work makes me happiest? 
  • Where do I want to live? 
  • What types of people do I want in my work life?
  • What does a good life mean to me?

This exercise isn’t something you do once to figure out the arc of your entire life. You need to come back to these fundamental questions during different seasons of your life and career, because the answers may change, sometimes repeatedly.

Over time, your working life is sure to change, in both good and bad ways. When you find yourself getting restless or feeling like you want more from your job, slow down and become more introspective. It can reveal a lot about what your next career or business move should be.

RELATED: How to Create Your Own Self-Employed Benefits Package 

Create a side gig

Even when you’re clear about what you want, one of the fastest ways to ruin your financial future is to take a flying leap from a steady paycheck. Jumping from a day job into an uncertain, full-time venture too early could mean trouble. You might face significant financial struggles and even get into debt. Many businesses take years of hard work before they’re profitable enough to support you.

If you slowly add entrepreneurial experience to your career, you’re likely to gain a variety of skills that will make you more valuable to employers.

Hanging on to your day job gives you the financial security you need to try out new business ideas, especially if you have a spouse, partner, or kids who depend on your income.

The best side gigs combine work that you’re excited about with something that you’re uniquely positioned to provide. These businesses may also come with a large existing customer base or appeal to customers who are willing to pay you well for the skills and experience you offer.

I was a part-time entrepreneur for a decade before I said goodbye to my employer. I enjoyed having a mix of job stability and entrepreneurial upside. Plus, I found that expanding my career by adding self-employment to a W-2 job made me much better at both.

If you slowly add entrepreneurial experience to your career, you’re likely to gain a variety of skills that will make you more valuable to employers. It may be easier to experiment with business-formation ideas when you have less financial stress or know a side gig could actually complement your existing career.

The bottom line is that creating a business on the side protects your income, diversifies your network, and improves your skills, instead of leaving you financially vulnerable. If you enjoy your entrepreneurial work and find that it pairs well with your day job, the benefits and personal growth can really pay off.

Negotiate your job flexibility

If you plan to start a business on the side, or you already have, you know you’ll be working more, perhaps a lot more. You might need to work early in the morning, late at night, or on weekends to fit it all in. That could stress your relationships or cause you to burn out if you don’t take some precautions.

Consider some different ways that you can tailor your business for your day job, and vice versa.

Once you’re confident about your business idea or begin seeing increasing revenues, you may find that you need more flexibility in your schedule. At that point, consider some different ways that you can tailor your business for your day job, and vice versa.

In 2008, my employer began feeling the financial pinch of the Great Recession. My podcasting and blogging career had started to take off by that point, so instead of allowing my position to get downsized, I proposed a solution that my boss liked. I’d work four days a week for a couple of months and then go down to three days a week for the rest of the year. Then we’d reevaluate where the company stood and discuss whether he could still afford to keep me on as an employee.

My employer would save money by paying me less, and I’d have more time to work on creating content, partnering with brands, and writing my first book, while still having a regular paycheck coming in. If I hadn’t suggested that solution, my company wouldn’t have known that I was willing to cut my hours. I didn’t offer to tell my boss what my plans were for my newfound free time, and he didn’t ask.

You may be able to negotiate with your employer for more schedule flexibility.

You too may be able to negotiate with your employer for more flexibility. You might ask to work fewer hours, to maintain the same total number of hours but work fewer days per week, or to work from home a day or two each week.

If you have a long commute or spend a significant amount of time getting ready, packing a lunch, and getting out the door in the morning, working remotely could save a lot more time than you think. Then you can invest that saved time in your side business.

Find more time in your day

If you can’t get more flexibility or you worry that even asking for it could put your day job in jeopardy, there are other options. One is to structure non-negotiable time for your business into your day. For instance, make a rule that you’ll step away from your desk for a solid hour (or longer if possible) during lunch to accomplish something meaningful for your business.

Find a nearby cafe or reserve a conference room in your office where you can work and eat undisturbed. I did that for many years, and it’s incredible how much you can accomplish in 45 minutes if you truly focus. If you can’t find enough quiet or privacy in your office, you could even work in your car.

It’s incredible how much you can accomplish in 45 minutes if you truly focus.

If working on your business during your lunch hour isn’t possible with your day job, consider coming to the office an hour earlier or staying later. You could also work on your business in a nearby coffee shop or a co-working space (where drop-in memberships can often be had for the same price as joining a gym) before or after your job. The idea is to create a routine that builds in regular time to focus entirely on your venture and to complete essential tasks.

Another option is to outsource a portion of your work. If you can afford to delegate tasks to freelancers, that can help you balance your to-do lists.

When your day job is so unpredictable that it prevents you from working on your side gig for long periods, consider getting a different job with a more reliable schedule. If you’re truly committed to getting your business off the ground, you may need a position with more flexibility so you can do both more easily.

Have a solid exit strategy

Having an exit strategy is a common concept in the business world. Partners and investors want to know what will happen after clearly defined milestones are reached, such as taking a company public or selling it after a certain profit margin is achieved.

But employees should create exit strategies, too. It’s a great way to force yourself to think about the future and what you would or should do next. With a W-2 job, you never know what’s around the corner.

It’s wise to start every professional relationship with an idea of how it could end.

Your company could suddenly downsize after a merger or an unexpected loss of market share. Your department could be reorganized after new leadership begins. All these scenarios have happened to me at some point in my career.

It’s wise to start every professional relationship with an idea of how it could end. This ensures that you’re never caught entirely off-guard. Knowing that you’ve thought about the end of a job or a business partnership can make you feel more secure about a potential split.

If you’re unprepared for an interruption in work or business income, it can be devastating to your emotional and financial life. So whether you’re laid off or you voluntarily quit, prepare for it now.

If you have a financial runway to find new opportunities or you’ve built an income from a side business, quitting or getting fired can be a positive experience. Having a good exit strategy can make the difference between feeling crushed by a job loss or becoming empowered by it.

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The post Zero-Based Budgeting: The Ultimate Guide appeared first on MintLife Blog.

The Highest Paying Trade Jobs On the Market

Pursuing a four-year degree or higher isn’t for everyone. If you fall into that group, it doesn’t mean you can’t get a high-paying job. There are a surprising number of trade jobs that pay salaries at or above careers that require a four-year degree. They pay well because they’re in demand and are expected to […]

The post The Highest Paying Trade Jobs On the Market appeared first on Good Financial Cents®.

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The post How To Retire At 50: 10 Easy Steps To Consider appeared first on GrowthRapidly.

What Is a Backdoor Roth IRA?

Jana S. asked this question recently about Roth IRAs:

I just listened to your podcast about what to do if you overcontribute to a tax-advantaged account, especially when you earn too much to qualify for a Roth IRA. I’m interested in how to do a backdoor Roth. What are the rules that apply for transferring funds from a traditional IRA to a Roth?

If you’re a regular Money Girl reader or podcast listener, you’ve heard me discuss the fantastic tax benefits of a Roth IRA. The problem is, as Jana mentioned, the door to a Roth IRA gets slammed in your face if you make too much money.

But sometimes when you can’t get in the front door, the backdoor is wide open! In this episode, I'll explain a strategy known as the backdoor Roth or Roth conversion. We’ll cover how high earners can have a Roth IRA without breaking the rules.

What is a Roth IRA?

A Roth IRA is a retirement account for individuals that’s never taxed after you make contributions. Instead of getting an upfront tax deduction (like you do with deductible contributions to a traditional IRA), you can withdraw Roth IRA contributions and earnings entirely tax-free as long as you’ve had it for at least five years and reach age 59.5.

You can make IRA contributions as long as you have earned income and no matter your age, although you can’t contribute more to an IRA than you earn. To contribute the maximum for 2021, which is $6,000 or $7,000 for those over age 50, you must make at least that much.

For 2021, single taxpayers must have an adjusted gross income of $125,000 or less to make a full Roth IRA contribution.

But, as I mentioned, not everyone qualifies for a Roth IRA. For 2021, single taxpayers must have an adjusted gross income of $125,000 or less to make a full contribution. And married couples who file joint taxes must earn $198,000 or less. If your income exceeds these annual limits, you can keep an existing Roth IRA, but you can’t make new contributions.

Note that if you have a Roth at work, such as a Roth 401(k) or 403(b), there are no income limits to qualify. Unlike a Roth IRA, you can max out these accounts every year no matter how much you earn.

RELATED: Can Minors and Seniors Have a Roth IRA?

What is a backdoor Roth IRA?

A backdoor Roth isn’t a type of retirement account, it’s a method for high earners to fund a Roth IRA even when they don’t qualify for regular contributions. If your income is below the annual Roth IRA threshold, you don’t need a backdoor Roth because you can make regular "front door" contributions.

In addition to tax-deductible contributions, you can also make nondeductible, taxable contributions to a traditional IRA. Interestingly, the IRS allows you to convert nondeductible IRA contributions to a Roth IRA, which is the “backdoor” concept. It's a clever and legitimate way to move money into a Roth IRA, even if you earn too much to qualify for one.

A backdoor Roth isn’t a type of retirement account—it’s a method for high earners to fund a Roth IRA even when they don’t qualify for regular contributions.

To create a backdoor Roth IRA, you must make a nondeductible (taxable) contribution to a traditional IRA and file IRS Form 8606, Nondeductible IRAs. Then you roll over those funds into a Roth IRA. You won't owe taxes, except on any investment growth in the account earned between the time of your traditional IRA contribution and the Roth conversion. If it was a short period, your earnings and resulting tax should be small. Once your funds are in a Roth IRA, the earnings can grow and be withdrawn tax-free in retirement.

As I mentioned, there’s no income limit for traditional IRA contributions. So, converting nondeductible contributions from a traditional IRA to a Roth IRA allows anyone, regardless of income, to fund a Roth IRA.

Problems with doing a backdoor Roth IRA

Though sneaking into a backdoor Roth IRA sounds great, it doesn’t always work as planned.

If you already have pre-tax money in a traditional IRA, tax must be prorated over all your IRAs.

The IRS requires you to lump all your IRAs together when you make a distribution and doesn’t allow you to cherry-pick one account to convert. So, if you already have pre-tax money in a traditional IRA, tax must be prorated over all your IRAs.

For example, let’s say you have $5,000 in a nondeductible IRA that you want to convert into a Roth IRA, and you also have $15,000 in a deductible IRA. Since you have a total of $20,000 in IRAs, the $5,000 nondeductible portion is 25% ($5,000 / $20,000 = 0.25 or 25%) and the taxable portion is 75% ($15,000 / $20,000 = 0.75 or 75%).

You must pay the same ratio of tax on the conversion. In other words, 75% of $5,000, or $3,750, would be subject to tax. It’s up to you to weigh the upfront tax liability against the future benefits of getting tax-free withdrawals from a Roth IRA.

However, if you don’t have any pre-tax IRA funds, you could convert the full $5,000 from a nondeductible IRA into a Roth IRA with no tax due. Yes, this gets complicated. Just remember that if you have a substantial amount of pre-tax funds in a traditional IRA, doing a backdoor Roth IRA doesn’t help you avoid additional tax. Unfortunately, you can’t convert just nondeductible funds and forget about your pre-tax amounts.

Workaround for doing a backdoor Roth IRA

If you really want to do a backdoor Roth IRA, and you have a retirement plan at work, you can use it as a workaround solution. You could remove your pre-tax IRA money from the equation by rolling it over into your 401(k) or 403(b). That would leave you with just nondeductible, after-tax IRA money to convert to a Roth. 

High earners who fund a backdoor Roth IRA still won't qualify to make new contributions to the account, but the converted funds grow tax-free, which could save a bundle.

This strategy only works if your workplace plan allows incoming IRA rollovers. Plus, make sure you're happy with the plan's investment choices and fees because you don't have as much control over a 401(k) as you do with an IRA. If you're self-employed, you could set up a solo 401(k) that allows roll-ins and move your pre-tax IRA money into it.  

Remember that high earners who fund a backdoor Roth IRA still won't qualify to make new contributions to the account. However, the converted funds grow tax-free, which could save a bundle in taxes. Additionally, Roth IRAs don't have required minimum distributions (RMDs), which means you can keep them indefinitely.

Doing a backdoor Roth can be worthwhile if you can afford to pay a potentially significant tax bill on your converted balance.

Consider that your converted funds count as income for tax purposes, which could move you into a higher tax bracket for that year. Plus, it's a transaction that you can't undo if you change your mind later on. So be sure to speak to a tax or financial advisor about the pros and cons of a backdoor Roth before crossing the threshold.