This Week in Your Wallet: Quiet Quitting, Meet Quiet Firing

This Week in Your Wallet:
Quiet Quitting, Meet Quiet Firing

Have you ever left one job for another, taken a look at the smallish balance in your 401(k) and decided that it’s not worth it to rollover…that instead, you’ll take the cash, pay a little in taxes and pad your wallet as you head over to your new gig?

I did this in my 20s and it was an incredibly costly mistake. I’ve run the numbers on what that small amount could have become, and ooof. (I had about $1,800 in the account in 1987 — if I’d let it run in the S&P 500, it would be worth about $55,000 today.) And here’s the thing. I’m not the only one. This is a chronic problem and it’s costing a lot of people — particularly minorities, women, low-income workers and young employees — a cushier retirement.

On average, some $92 billion in savings leaves America’s retirement system each year because we switch jobs and prematurely cash out of workplace retirement accounts. In 2021, Fidelity reported processing 1.1 million mandatory cash-outs for clients. Of the 1.1 million, 66% were amounts less than $1,000 that likely never made it back into a retirement account.

Fortunately, change is coming. Fidelity, Vanguard, Alight, and Retirement Clearinghouse recently announced a partnership designed to stop cashouts from happening as often by making moving money from one retirement account to another more automatic. The creation of a consortium called “Portability Services Network, LLC” will ultimately allow U.S. workers who change employers to have their retirement savings automatically moved to their new retirement plan. Kudos!

Speaking of financial trade-offs, like cashing out 401(k)s, financial trade-offs happen to be the theme of our new survey. Your responses will shape the content we create next and influence headlines outside of HerMoney (like this recent one in Forbes). As a special thank you, there’s the option to submit your email at the end for a chance to win prizes (like Elton John concert tickets!). Here’s where you can weigh in.

Quiet Quitting? Try Quiet Firing

Sure, your burnout-induced reduction in productivity at work may seem to be going well, but be warned, it could eventually lead to a layoff. Yours. More managers are noticing the signs of quiet quitting (it’s kind of hard to miss such a decrease in employee output) and they may be silently moving your chances of career advancement into Siberia without ever alerting you, in a new trend dubbed “quiet firing.” The Wall Street Journal’s Callum Borchers explores what can happen when employees who begin to coast for too long then get excluded from key meetings and plum assignments, on the road to being nudged out the door.

Part of the issue may be an out-of-sight-out-of-mind reaction. A survey by Microsoft showed some 87% of workers reported being just as effective at home as at the office, according to the WSJ. Thing is, 80% of their bosses did not agree. If you’re determined to stay remote as long as possible, a recent HerMoney Podcast (Inside the Mind of a Good Manager) addressed what employees can do to keep their supervisors updated on their efforts. Over-communicating, especially in remote and hybrid situations, is a way to let the higher-ups know the work is getting done. In the podcast, Jim Edwards, former editor-in-chief of Insider’s news division, explained that managers simply can’t know what’s going on with all of their employees all of the time. Intuitive staff members can stand out by solving problems proactively, and by bringing accomplishments to a manager’s attention through emails, phone calls and especially during performance reviews.

P.S. About that burnout? It might not be what you think it is.

Renting A Car? Time To Review Your Bill

For years, airlines squeezed travelers for more money by charging for multiple checked bags and better seats. But with inflation pushing the price of everything higher, we’re seeing similarly nasty fees creep into the rental car industry. The Wall Street Journal’s Dawn Gilbertson reports several veteran travelers have been dinged with fuel service charges (fees for gas even when they say they filled up, plus “convenience fees” to pay in advance for tolls.) When questioned about the charges, car rental companies in these cases removed the fuel fees, some of which were as high as $40. The lesson we’re taking from this: Document everything. That means the next time you rent a car for business or pleasure, take a photo of the odometer and the gas gauge when you pick up the vehicle. Then, take another photo when you drop off the car. Save the pix on your phone and hang on to all of your receipts for gas, in case you need to prove you really did fill up the tank across the street from the airport.

No, Carrying a Balance Will Not Raise Your Credit Score

First, the good news: Credit scores seem to be moving up for many Americans. A new survey found that more than a quarter of U.S. residents (some 27%) reported their credit scores have gone up since the start of the pandemic. Fantastic. The bad news, though, is that because we don’t understand enough about what’s moving our scores, we might be costing ourselves some money.

Case in point: NerdWallet’s Erin El Issa writes that nearly half (46%) of people recently surveyed incorrectly believe leaving a small balance on your credit card is better for your credit score than paying it off in its entirety every month. Newsflash: It isn’t. In fact, it’s likely bringing your score down. And, eating a hole in your wallet. As El Issa notes, this misconception is particularly dangerous because it can cost people even more in interest, which is calculated on your daily average balance, not the small balance left on the card at the end of the month.

And if you’ve shared a few common financial misconceptions over the years, don’t get down on yourself — get empowered. In our 8-week long financial + budgeting basics course, FinanceFixx, you’ll be taken on a journey (with a coach you’ll meet with one-on-one) to help you understand your money better than ever, and see how it can work for you. We’d love for you to join us at our next session, starting on November 3rd. And if it’s investing that you need help with (and who doesn’t need a quick refresher in this market?) then we’ve got you covered there, too, with our new investing club for women, InvestingFixx. After a few weeks with our inspired group, you’ll be choosing stocks, chatting dividends, and channeling your inner Warren Buffett… all while having a ton of fun.

Hope to see you soon,

Jean

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