Today, the word is out that unemployment has reached 9.5% . As the unemployment rate inches toward 10%, many are wondering what to do, and how they will cope. For the unemployed in Michigan (which has the highest unemployment in the country), help may be coming a little sooner. K-Mart plans to offer discounts to those who are on the unemployment rolls .

For those who can show that they are registered with the government as unemployed, K-Mart will provide a “Smart Assist Savings” card. This card will be valid for six months, and will offer 20% savings on K-Mart brand products . While the offer won’t apply to everything in the K-Mart store, discounts on already discounted labels are likely to help — and may even lure customers back to the store. Douglas McIntrye offers this look at the strategy in 24/7 Wall Street :

The new savings package is not completely selfless. K-Mart caters to the lower end of the middle classes, a segment of the economy that has been especially hard hit as corporations cut costs. K-Mart has probably lost many of its customers completely and believes that the new incentives will bring these people back .

Even with the alterior motive, the savings program is a nice touch during these tough economic times. Michigan was probably chosen due to the fact that before K-Mart merged with Sears, Troy, Michigan was its headquarters. If things go well in Michigan, K-Mart could roll out the program to other markets .

Image source: Wikimedia Commons

When most people think of certificates of deposit (CDs) , they think of the plain old kind. You put money in for a period of time between three months and five years, and you get a guaranteed interest rate. You use them for CD ladders and any number of other things. I had heard of Brokerage CDs and High Yield CDs , but I had no idea that there were even more options than that. Bargaineering offers an excellent list of lesser-known CDs :

• Bump-up CDs
• Liquid CDs
• Zero Coupon CDs
• Callable CDs

It is important, though, to be careful when you start getting fancy with any financial product. Brokerage CDs, for example, may not be FDIC insured . Interest rates vary, and terms and penalties vary as well. Some CDs offer higher interest rates (callable), while others allow you access to your money at any time, penalty-free (liquid). But for every advantage, there is a disadvantage to balance it. You should read the fine print before committing to one of these CDs .

In the end, as with all personal finance transactions, you need to study what would be in your best interest and choose the right product for you. There are some great ways to maximize your cash, and CDs are more versatile than you might realize . Be sure that you understand how they work so that you are able to make an informed decision. Before investing in anything , you should understand how it works.

Image source: Daylife

Because of the scope of the economic stimulus bill passed last month, it is practically impossible to find a succinct summary of everything offered in the bill. However, it is possible to find out in bits and pieces. One of the more interesting stimulus measures includes payment to those on Social Security right now. If you are receiving Social Security Income or Supplemental Security Income, you will receive $250 without doing anything. There is more information on the official Social Security Administration Web site — including a video.

This is a nice bonus for seniors and others already receiving Social Security. I know my grandparents will be pleased. It is still unkown how the payments will be distributed: Check or additional amount in the regular deposit. Personally, I think a check with an enclosed explanation would be the best way; an extra amount in the regular deposit could cause confusion.

Watching out for scam artists

This recession has spawned a number of scams, and this Social Security stimulus will probably be no exception. There is nothing that recipients need to do in order to receive their stimulus payments, so be wary of anyone telling you that you need to fill out some paperwork. Fine Tuned Finances offers this about one scam possibility:

This benefit from the American Recovery and Reinvestment act will almost certainly attract con-artists that prey upon seniors. The most likely scenario is that a con-artist will send a fraudulent form to a social security recipient and request personal information so that the payment can be processed. If a victim were to fill out one of these fake-forms, the con-artist could use that information to steal the identity of the victim. It would be well worth it to remind any senior adults in your life that they will not need to do anything to receive this benefit and should not fill out any special paperwork to receive it.

The SSA expects that payments will be made during the month of May, but details are not all worked out. Even though the government hopes these will be spent to help the economy, I suspect that most seniors will save the money — or use to help offset rising health care costs. And this is probably wise. When you’re on a fixed income, and when inflation seems likely, your best bet is to set any extra money aside in some sort of an interest bearing account.

(www.thegoldenpencil.com)

The other day a writing buddy of mine called. He was tempted to take a writing gig that paid way less than half of what she normally gets. True, it was a rather unique opportunity with a major trade publisher. If he did this job well he’d have an excellent contact which might lead to more lucrative work in the future. It wasn’t, however, a book, nor did it earn royalties. In my mind, the “might lead to more lucrative work” some day, some time down the road is, well, most often futile.

We’re close so I asked him what was really up. It turned out he was feeling cash poor. I asked if he had any savings, and he said he did, but he didn’t want to dip into them.

I understand not wanting to spend savings - it’s hard enough to get the money saved and horrid to see it disappear. I finally realized, however, that I have to have a savings account I’m willing to use to smooth out the ups and downs of my freelance writing income. Once I opened a savings account (I use Ingdirect.com) that I created just to smooth income I no longer worried as much when I had to use it for that. After all, I earned a bit of interest and often found I didn’t have to use it right away. I call it my Prudent Reserve account.

It took awhile to build it up to the point it actually helps fill in dips in income, but once it was big enough to do so, it made my life and my pricing so much easier. Now I rarely feel pressured to under price myself.

Of course, my Prudent Reserve account isn’t my only savings. I regularly put 12% in a retirement account and a tax savings account as well. I don’t always manage to stick with these percentages, but often enough so it works.

What I hadn’t anticipated is how secure that savings account would make me feel when I was setting prices. Because of that account, I’m free to turn down poorly paying work, or work I simply wouldn’t like. That’s freelance freedom.

Write, and save, well and often,

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If I got everything my way, someone else would handle the business side of my freelance writing business… and probably do the marketing too. Or maybe not. Now that I’ve learned more about managing my money and have gotten mostly out of vagueness about my income and expense, it’s actually kinda fun keeping track of it all.

I’m learning to plan ahead a bit too. And play closer attention to my intuition as well. For instance, I’ve noticed my current computer is taking a bit more maintenance than it used to. I’m running disk cleanup more often because it’s slowing down more often. That’s a sure signal, as far as I’m concerned, that a new computer, or cpu is in my future… not tomorrow, but not in two years either.

Then yesterday I heard that Bill Gates and crew have officially stopped shipping Windows XP. I dread switching to Vista. I’m not at all impressed with what I hear about that operating system. So I’m wondering if Linux is ready for users like me or if I really want to switch to a Mac - either means a whole drama and considerable expense around software.

Finally, because I blog at b5media, I get to see the headlines from the business channel when I go into my own blog, and there’s: Oh Crap Situation 29: Computer Problems

I didn’t even read the article before I went to Ingdirect.com (a great online bank… if you sign up, mention me) and opened a new computer savings account. A new computer is in every freelance writer’s future. My experts tell me I should plan on buying a new one every two years or so… I often will got maybe a year longer than that, but not much more than that.

Why I haven’t set up a savings account for this expense before now I don’t know. But I’ve got one now, and I suggest every freelance writer and editor do exactly the same thing.

Write well and often,

Two newsletters:
Abundant Freelance Writing - a resource for freelance writers including 3x a week job postings.
Writing With Vision - for those who want to get a book written.

Image from http://www.sxc.hu

Although there are real advantages to freelance writing, there are also some problems. The biggest is the feast or famine nature of the work flow. There are several approaches, including:

• Residual income from book and other royalties, web site affiliate income and the like. The goal is here is to continue to earn income from work already done.
• Regular gigs – work that is performed weekly or monthly or some other repeating and predictable fashion.
• Savings to fill in the gaps.

There are challenges to each approach. For example, royalty income tends to taper off over time; building affiliate income takes time and often, at least some investment.

Regular gigs eat into time for larger projects or personal writing. A regular gig probably pays at least some less than then the rate you charge for one-time projects. Under earning is the risk.

Savings disappear in a hurry if you’re not careful and paying close attention to your marketing.

It really takes balancing all these elements and paying close attention to the actually flow of your earning and spending. Unless, of course, you’ve got a private income ;)

I’d love to hear your experiences with the feast and famine phenomenon of freelance writing.

Write well and often,

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