One of the most beautiful phrases in the American labor lexicon is "paid time off." Or, one would think. But a number of reports are analyzing why Americans are just not leaving the office even when they have the right to. Why? When you can have a handful of days to get a massage in Bali, adventure through Rome, or pet some koalas in Australia, all while letting your bank account fill with your regular salary, why would you not take advantage? Instead, workers are coming in on sick days and leaving their vacation time in the dust. That means, they're basically paying their employers to be at work!
It seems counterintuitive, but our culture is one that fears missing out. American workers, especially those who can work remotely, are working all the time. Taking that time off means missing something, being unable to let go while on vacation, or having a huge workload to deal with before you leave and right when you get back. So many Americans say, "Why bother?"
Other workers have a different philosophy and think that their decision to take a vacation is a sign of laziness or weakness. But while you may think you're being heroic by forgoing your vacation, employers put that policy in place for a reason. It's to provide workers with time to deal with unexpected personal emergencies, sickness, and spending time with their families and friends without incurring debt. Paid time off is designed to give workers a well-deserved break. According to Colleen Kane of Fortune, "people won't take advantage of the policy unless the culture really supports it." Refusing this offer can have a variety of negative effects for both you, your company, and your family.
We can only run so long before we need a break, a rest, and some nourishing food. We're human, after all. The same goes with work. We need sleep in order to feel fresh and motivated in the morning. In the same way, a vacation can act as a necessary bookend to a series of productive months. Having something to look forward to can sometimes be a distraction, but it can also be that piece of chocolate cake on the end of the stick, just what we need to make it through. Long bouts of work without a moment to breathe will leave us slow, tired, and more like robots.
No one should come in sick to work. Even when you have a simple cold, coming into the office could do more damage than good. First of all, you won't feel like yourself, so you won't be able to perform to your best ability. Being sick at work will also slow your recovery time, so instead of one day off and 4 other productive weekdays, you'll have 5 semi-productive weekdays. No one will be mad at you. In fact, they'll be glad that you took the courtesy to get better, and sacrifice yourself for the sake of the team.
The Cost on Businesses
Think you're the only one that isn't benefiting from using your paid time off? Think again. According to the Bureau of Labor Statistics, paid time off funds make up around 7% of total salary in the private industry. And according to The Wall Street Journal's coverage on a U.S. Travel Association study, unused vacation burdens businesses with $224 billion in liabilities. So, not using your vacation isn't just putting you at a disadvantage, but it's bad for the economy.
The Cost on Family
Your family is appreciative for all you do to keep bread and desserts on the table, and especially if you have kids, vacation time is a coveted time. Choosing to stay in the office means missing pivotal moments at home and time to make memories. It's important to be able to disconnect and spend time with those you love, because pretty soon the little ones will be off to college and will want nothing to do with you anymore. So appreciate your family, just like they appreciate you.
We work in an undoubtedly workaholic society, which has its benefits. Increased productivity is one imagined result, but unfortunately, humans are not designed to be working machines. That's why it's wise to take advantage of your paid time off and make the most of it. You deserve it.
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- Why Americans just won't take time off | Fortune.com ›
- Overwhelmed America: Why Don't We Use Our Paid Time Off ... ›
- All Work and No Pay: The Impact of Forfeited Time Off | Project: Time ... ›
- Worst Excuses Ever for Not Taking Vacation Time & Paid Time Off ... ›
- 55% of American workers don't take all their paid vacation ... ›
- Not Taking Time Off Is Like Getting a Pay Cut (If You Get Paid ... ›
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.