Should Everyone Receive a Living Wage?

Accountants KPMG found that 20% of workers (or nearly 5 million people) do not earn a “living wage”, but what does that mean?

The government sets a National Minimum Wage, currently £6.19 an hour, which companies must pay their staff. As many underpaid workers like myself know, it is almost impossible to pay for rent, food, bills and basic living costs on this wage, even when working full time.

To meet the basic standards of living, it has been estimated that people need to earn £7.20 an hour. This is dubbed the “living wage”, but unfortunately KPMG have shown that many companies prefer to pay the lowest possible amount to their employees.

This makes me angry.

Full time work should provide enough money to live on. Many companies pay the least amount they can get away with, knowing that the government will top up their employees' bank accounts with Working Tax Credits and the like. Many people, including myself, take on a second job in order to make ends meet. This leaves you feeling exhausted and more like a commodity than a valued employee.

Companies argue that they cannot afford to meet the recommended living wage, but from my experience they are shooting themselves in the foot. Paying a higher wage, even an extra 50p an hour, makes a big difference in the employee's psyche. As KPMG themselves have found, paying a living wage increases staff motivation, performance and attendance.

When you work for minimum wage, you find yourself wondering why you put up with all the hassle for such a measly reward. These jobs are usually high-turnover, with staff frequently leaving the company in the lurch for a better offer. Surely the money spent on paying the remaining staff overtime, staffing agency fees, job advertising and training a new employee could be better spent encouraging staff to be loyal to the company in the first place!

If you own a company and respect and value your staff, please pay them a living wage.

Financial Tips for New Graduates

Congratulations on graduating university and entering life in the real world! :) I graduated a year ago, almost to the day, and I have some financial advice to share with you! It's strange going from student life to working to earn more money than you ever had before, so it's important you pay attention to what you're spending to live happily within your means.

Live at home if possible, rent a cheap room if not – It's not glamorous, but living with your parents for a year or so while you save some money will save you so much money! I pay my parents £40 a week in rent and bills, which is a lot cheaper than even lodging would be. If that's not an option for you, try lodging or getting a flatshare with some friends. 

Start an emergency fund – The first thing you should do when you start earning money is put at least 10% of your wage straight into a separate bank account, to provide a buffer in case of emergencies. You might need it for expensive car repairs or job loss or visiting a sick relative, but ONLY use it for emergencies! Save about £1000 before focussing on repaying your overdraft/credit card debts.

Look for the perfect job, but get ANY job to tide you over – First things first, apply for Jobseekers Allowance. That's what it's there for, so don't feel embarrassed! Spend most of your effort hunting for that perfect job, but apply for any high-turnover job you see too; earning minimum wage is better than getting just £56 a week on the dole. Over the past year I've worked as a chambermaid in a hotel, in McDonald's and as a waitress. It's lame but it pays the bills while you get something better!

Don't pay off your student loans early! - I encourage you to blatantly ignore your student loan! :) In April you will begin repayments of 9% of whatever you earn over £15,000 (which will be automatically deducted from your wages). If you have any spare money you should put it into a savings account (like an ISA) rather than paying down your loan, because you'll make more in interest than you save yourself by lowering the debt. This debt does NOT affect your credit rating. 

Do pay off other debts ASAP – Unlike your student loan, your overdraft and credit cards WILL affect your credit rating. You will also likely be charged interest on credit card debt, and while your overdraft might be interest-free now it will not remain so forever. After building your emergency fund, pay these debts off aggressively (as much as you can afford, not just the minimum payment!) and save yourself a LOT of money in interest!

Avoid having a car – If you can use public transport to get to your job, DON'T get a car. Including £300 of repairs, buying and running my old Peugeot Jools has cost me around £3000 this year! OUCH! Don't even THINK about buying a brand new car! Put what you would pay in car payments into a savings account and pay cash for a second hand one in a few months time!

Don't buy things you can't afford – Purchasing things using credit means you often pay through the nose in interest. Credit cards are great for building a credit rating IF you pay them off in full every month. If you can't trust yourself to do that, don't use them!

Keep a spending diary – Do you wonder where your money goes? Of course you remember the big things, but a few pounds here and there really does add up. Keep a record of your spending (it only takes a couple of minutes a day) and use it to stay in control of your budget!

So there you have it. Good luck out there in the real world! It's strange to finally leave education (maybe that's why I'm going back again, haha!) but it's a new chapter in your life. Make sure you start it right!

Will Going to University Get You A Good Job?

Official government numbers from the Office of National Statistics say that 20% of people who graduated in 2010 were still unemployed in 2011. With those odds, is it better to stick at the job you have at home, or branch out into the unknown?

The Boyfriend recently said that after graduating most of our friends have gone straight back to the same jobs they had before university. (This from the guy that is now an architectural assistant about to go and do a masters, neither of which is possible without a Bachelors degree!) It got me thinking about what people are actually doing with their degrees though!

The Pros of NOT Going to University

A lot of my friends say they felt pressured into going straight to University. If you don't know what you want to do, then NOT going to Uni gives you time to decide what you want out of life. Stay motivated though, use your time wisely and learn about various careers you might be interested in.

If you know what you want to do and it doesn't require a degree, you can start at the bottom and work your way up. You will be more respected within the company than a new graduate that went straight in at manager level. You will also have a few more years experience! My friend went to University, but worked the holidays at a fun park he is now the manager of back at home. He said he will never need the specialist knowledge he gained at University, which was for him a waste of time and money.

If you know you want a very practical career, consider an apprenticeship. These can be VERY poorly paid (£2.60 an hour is the minimum wage, which is absolutely unacceptable if you ask me!), but if you find a good one you will be paid a fair salary AND be guaranteed a good job at the end. A friend trained as an engineer for the London Underground and is now contractually guaranteed a high paying job with Transport For London.

The Pros of Getting a Degree

A degree is often a requirement for a more complex, specialised job. In my chosen career of research, not only do you need a Bachelors degree, but a PhD is vital too! Research the job requirements for what you want to do, then target your learning towards it.

In a bad economy, no job is 100% secure. A degree is something that you can fall back on if your chosen sector falls under completely. It shows you have transferable skills and motivation.

One of the major pro points of going to Uni aside from education is personal development. You mature so much working and studying away from home. For most students, it is the first time you've been away from home and you learn how to function as an adult whilst still being partially protected from mistakes. I think it is a hugely important part of university and employers will know that you are a more rounded individual.

If you decide University is for you...

Find a course that offers a Sandwich Year, which is a year in industry as part of your degree. This will give you the best possible edge when applying for jobs, because you will already have experience. There's no reason not to do this; even if you decide you don't enjoy your chosen career, you will avoid making this wrong decision in the future.

The Bottom Line

I think the absolute most important thing is to decide what you want to do. If you have a vague idea (like I knew I wanted to do something in Biology), what jobs would be open to you? Will you need a degree for that? If yes, then go to University, study a broad field and specialise later when you decide.

If you are not SURE that you want to go to University, will you be motivated enough to continue? If you drop out, you will still have a huge mound of debt to pay off and nothing to show for it. Student loan repayments will cost you 9% of whatever you earn over £21,000 if you start this year, so make sure you gain something from the experience!

If you don't have a clue what you want to do, take a year or two to decide. Take a few courses in things you might be interested in, volunteer in a field you think you might enjoy (for example, if you're interested in becoming a teacher, volunteer with a youth group), ask people about their experiences. There's no harm in waiting until you know what you want, and the extra couple of years of maturity and experience will give you an advantage over others if you do decide to go to Uni!

The Hidden Costs of Finding a Degree

Over the past month I've started some serious PhD applications. It's very time-consuming, but also surprisingly expensive! If you are considering applying to university, you should ensure you have the money to cover the following expenses:

Admin Fee

Some universities actually charge you an admin fee to apply for a post-graduate degree! This is typically institutions where they receive a huge number of applications. The University College London charges £25 for an application, whilst Oxford and Cambridge are charging £50 this year!

Travelling

Most people will have to travel to interviews and open days. Depending on where you are, this can be very expensive. From Cornwall, the transport of choice is almost always National Rail using a Young Person's railcard (purchased for £28 for one year), which knocks around a third off travel.

Other cheap transport options include Megabus (very useful if you live in, or are travelling to, London), National Express (more flexible than Megabus but often nearly as expensive as a train ticket), or driving.

There are some potential concerns about driving there:

• How nervous will you be – will this affect your concentration on the road? Could you get someone else to drive?
• The fuel costs – Google maps can estimate the cost of fuel for your journey based on an adjustable price, fuel type, and fuel consumption rate of your car. I have found it to be fairly accurate.
• What time is the interview? Will you have to stay somewhere overnight? This will bring additional costs.
• What is your back-up plan? Cars break down, you could get stuck in traffic, there might be a diversion. How will you get there?

Then again, it would be a lot more flexible to drive. It could actually work out cheaper too because of the huge hike in rail fares. You could arrange your day to avoid accommodation fees and additional public transport costs in town too.

Interview Costs

What would you wear to an interview? If you are anything like me, you've probably never had a formal interview before you went to Uni. It is important to make a good impression. I would definitely recommend wearing smart attire, preferably a suit or blouse and skirt. Make sure you have smart, clean shoes to wear.

None of this has to be hugely expensive. A ladies suit cost me about £35 a few years ago. Girls could get a smart skirt and blouse for significantly less from discount shops or even charity shops.

Not to mention..

Don't forget that when you've found your ideal course you may have to find your own accommodation, especially as a graduate. This will involve additional admin, travel and accommodation fees!

Good luck, and please wish me the same!

Unemployment

I'm stressed about finding more work at the moment. Can you tell?

Recent figures have shown that UK unemployment reached a 17-year high in June-August. 2.57 million people were out of work, which included nearly a million 16-24 year olds (21.3% of those eligible to work). For five days I was one of those unemployed young people.

I regularly check the JobCentre Plus website for new jobs. The majority of positions advertised in my area are either 2-16 hours per week minimum wage roles or self-employed things like leaflet distribution or Avon representatives. There are very few “white collar” professional jobs, partly because they are advertised on more specialised websites, but also simply that there are none around. It's probably a problem everywhere, but in Cornwall especially young people are forced to leave the Duchy to find the jobs they have earned through years of study. The reality is that companies do not want to create new jobs in the current economic climate, for fear that they will have to downsize in the future. Many new public sector jobs have to be filled from other civil service departments rather than being opened up for new people to enter the system.

Imagine an unemployed person. Did you imagine someone sitting on the sofa, staring at endless channels of daytime TV drivel? Most people WANT to find work. Trying to find a job requires HOURS of work each day. I was searching and applying for jobs for about 6-8 hours each day. It was far more mentally draining than a regular 9-5!

I hate the ever-increasing unemployment rate. There are a lot of things I disagree with David Cameron about, but one thing he said was sadly true, “every job that is lost is a tragedy for that person and for their family”.

Emergency Fund EMERGENCY!

It's always a good idea to have a bit of money stored away for unexpected emergencies. Unfortunately for me, I have a potential upcoming emergency and no fund set aside!

Unless my situation changes and I find a permanent job rather than flitting from seasonal job to seasonal job, I will be completely without income for January. Even the Chinese restaurant where I work part time will be closed for the month.

Generally it is recommended that you make a list of all of your regular monthly expenses, such as rent, food, utility bills, fuel, insurance, etc., and then create a fund large enough to cover all of these outgoings for three months. This guards against loss of earnings, car repairs, expensive dental work, etc., etc. Dave Ramsey is a famous American financial counsellor and recommends setting up a $1000 emergency fund, even before paying off any debt. Whilst it's a good idea to save up three months worth, I only have three months until the start of January, so I'm aiming for at least enough to cover January's costs, just in case!

My outgoings for January:

Rent - £0. Fortunately if I am completely without income my parents would be able to let me live rent free for a short period of time. I am completely glad that I don't have my own place in a situation like this!

Car insurance - £56. Yes that's my monthly premium! It's my first year as the main driver rather than a named driver, so I have no No Claims Discount and I'm still under 25. :(

Mobile phone - £17. This is my main source of contact for potential employers so I don't want to give up my contract for a month.

Fuel - £100. I'm budgeting a normal month's fuel consumption because I would be on the hunt for jobs which will (hopefully) involve driving to interviews!

Living - £50. This will cover a few items of food each week to contribute to the house.

Small buffer - £25. Just in case something (else) comes up.

= £248 so budgeting £250 in total.

I'm aiming to have a £250 January emergency fund by the end of the year. I already have £70 saved from tips and some money that I haven't yet put in the bank. If I put away £10 for each of the 13 weeks left I should have £200. This will mean I'll only need to earn £4 in tips per week to make it up to £250 (averages £10-20 so this shouldn't be a problem).

All extra money will be saved rather than spent, which includes tips, extra fuel money (unlikely but still!), birthday money (November), spare living costs, any money left from the Christmas budget, etc.

Even with this emergency fund, I REALLY need to find another day job. My projected finances if I just continue on with the Chinese restaurant and the hotel next summer is looking even bleaker than they are now! GRRR!

Hunting for Seasonal Work

The dreaded day has arrived.

The hotel is cutting back our hours to four days next week instead of the standard five. We're already finishing an hour earlier each day, so this is taking me from a comfortable 35-40 hours during the summer (including evening shifts in the laundry) to about 20 hours a week. Currently this is being compensated for by my 15-20 hours in the evenings at the Chinese restaurant, but very soon this will be my only source of income. (The research job I have been promised is still very much in the planning stage.) I cannot try to live on ~£100 a week whilst paying back debts over winter.. my projected bank balance for winter/spring is looking as bleak as when I graduated!

I need to act now.

So, new plan. Tomorrow I'm off to town to visit my Nana and also catch up with a friend. I'm going to head in early and trudge round the shops. I will ask in every shop, “Do you need additional staff for Christmas?” If I can't find anything in Newquay (it's a tourist town so actually pretty quiet in winter anyway) then I'll head over to Truro in the afternoon (a larger town with more chain stores!!).

Wish me luck!

How to Find a Job

The recently released UK unemployment figure for July was 2.51 million, or 7.9% of the working population.

I feel for the majority of people who are desperately trying to find work. It is very difficult to find a professional job in Cornwall, where the majority of positions are seasonal roles related to tourism. I applied to many research places only to be outcompeted by people who should be able to find much better opportunities (although fortunately have now found a position that should start next month).

Here are a few things I learned during my search:

Spend SEVERAL hours a day looking and applying for work – Treat your job hunt as the full time occupation that it is. I spent 4 to 8 hours most days looking and applying for the latest positions advertised in my area.

Where to search – As well as your local paper, you should regularly check the government's Jobcentre Plus website, which has all of the positions advertised in your local Jobcentre. Check it every day because the best jobs are rapidly snapped up. If you know what area you want to go into, search on websites dedicated to your field (for example I regularly checked the New Scientist website for science-y roles. You should ask around in case anyone has heard of a job opening. Walking through town you will see several job advertisements in shops and local businesses. Keep your eyes and ears open!

Claim Jobseeker's Allowance – If you are over 18 and actively seeking work you are entitled to Jobseeker's Allowance, so don't feel embarrassed to claim support whilst you are unemployed. If you are under 25, you are entitled to £53.45 per week. It's not a lot, but it'll help you get to job interviews and keep food in your belly.

Find a high-turnover job to tide you over – Jobseeker's Allowance is useful, but no-one can really live on £53 a week. Find yourself a seasonal or minimum wage job with a short period of notice (most will be just one week so you can leave as soon as you find something better) and flexible hours. This will give you some financial breathing room whilst you hunt for the perfect job for you. For example I spent this summer working for minimum wage as a chambermaid in a hotel, receiving ~£180 a week for ~34 hours work. Ensure that you sign off from Jobseeker's Allowance once you find a job, even if it is just temporary.

Tailor applications to each role – Once you've found something to apply for, research the company and the position and tailor your CV (resume) accordingly. What skills does the job need? Which of your experiences is the most relevant? Ensure that if they ask for a particular skill you give examples that show you possess it. If you have related work experience it should be on the first page of your CV, however if you are changing careers you should have key skills on the first page instead.

Send speculative letters – If the companies you want to work for aren't hiring it's time to get pro-active. Write a speculative letter (and accompanying CV) describing why you would make the perfect addition to their company. List your skills and experience and how it relates to what they do. This is how I got in contact with the company I will be working for soon. Often you won't even hear back from them, but you just might make them think about potential opportunities they're missing out on!

Don't give up – It's can be soul destroying to keep receiving rejection letters or not even hearing back from applications you spent hours perfecting. Don't forget that you are competing with people who are likely a lot more experienced than yourself, especially if you are a recent graduate like myself. The best thing you can do is to just keep going!