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الخميس، 16 أغسطس 2018

How the education experts motivate kids to learn about money

Children learning

In our increasingly cashless society, teaching children about money is more vital than ever. Our experts explain the best ways to do it.

Undertaking good money habits starts at a young age and an increasing number of schools are now providing personal finance lessons to help children get to grips with money matters.

But not all schools have to teach personal finance (only those that follow the national curriculum should do so), so learning about money needs to happen outside of the classroom, too.

Research conducted by NatWest in November 2016 shows that just 43% of young people feel confident managing their money. Worryingly, almost a third of those aged 16 and 17 have no experience of putting money into a bank account, while 59% can’t read a payslip.

We’ve rounded up some top tips from education experts to help parents and grandparents teach their children about money.

Ditch the plastic

Young Money, which is part of the charity Young Enterprise, aims to give young people the skills, knowledge and confidence to earn and manage money by providing advice and resources to schools, colleges and universities.

Russell Winnard, head of educator services at Young Money, says teaching children where money comes from is crucial. “We are an increasingly cashless society and it can be difficult for young people to understand what happens during a contactless payment transaction,” he explains.

When in shops, paying in cash can help children see that you have to swap money for goods, rather than just tapping a magic plastic card on a machine and taking what you want.

Mr Winnard says: “It’s good to involve children in the weekly shop – get them to help you choose the best-value products and add up the cost of the shopping basket on the way round.”

Survey results published in February 2018 by financial provider Prudential found that over three-quarters (78%) of teachers and more than a third (37%) of parents believe the growing cashless society is harmful to a child’s financial development.

Mr Winnard adds that showing your child your payslip and explaining how you found employment and earned that money can help them understand where money comes from.

Make tough choices

Education group Stride works with schools in the South East and Greater London to incorporate enterprise courses into the curriculum. It aims to introduce children to the business world and runs sessions that mimic real-life scenarios where children are loaned money as a team and challenged to design, set up and run a profitable business.

Elena Macia, co-founder of Stride, says giving children real-life financial responsibility as early as possible is key.

She says: “If your child wants a ‘big ticket’ item, encourage them to plan how they will achieve it – maybe they can ask for birthday money rather than gifts, earn cash by doing chores or save their pocket money – get them to do some sums to work out how much they need and how long it will take to save it.”

Getting children to make choices related to money can also help them start to think about the value of cash, she adds. Parents and grandparents can set a budget for an afternoon out and help the kids work out the best way to allocate the money – they may discover that forgoing pricey drinks and snacks at the cinema means the family can go for a meal afterwards instead, for example.

Talk about Beyoncé

Financial education charity MyBnk provides workshops to people aged 11 to 25 to help them learn about saving, budgeting and starting up a business. The charity works with schools and youth organisations, and says it has helped more than 200,000 young people to date.

Declan Wilkes, head of communications at MyBnk, says making things fun is important to capture kids’ imaginations. “Starting a conversation about the cost of Beyoncé’s gold leggings might not seem serious but it can help start a discussion about the cost of living in relation to income,” he explains.

Other exercises he suggests include asking children to explain the difference between something you want and something you need. Ask them to list the last five things they bought and decide which category they fall into.

For older children, he suggests linking chores to rewards in order to help encourage putting a value on money. Another useful exercise is involving kids in the household finances to help them understand what it costs to run a house.

He adds: “You can identify a savings goal and plot out a way to achieve it – perhaps by explaining how to cut back on spending or incentivising savings by matching what your children put aside.”

Delayed gratification

RedSTART is an initiative that aims to help young people learn to budget, save, invest and give back to society. Its goal is to educate one million children and give them the skills to manage their financial future.

Natalie Beardwell, head of marketing at RedSTART, says creating the balance between fun and learning is important if you want to get kids interested in money. RedSTART, for example, runs a workshop that asks children to grow £500 of virtual money as much as they can in a day by applying simple investment and money management concepts.

Another important skill to teach young people is delayed gratification. Ms Beardwell suggests giving kids first-hand experience of managing a budget with a pretend currency – agree what a treat will cost and then explain that they can spend their currency for a small treat every day or save up for a bigger treat at the weekend.

She says: “A habit such as delayed gratification is simple to learn and will be hugely beneficial once children start dealing with money in the real world – and learning that money is all about helping your future self.”

Safety first

MoneySense is an education programme for those aged five to 18, backed by high street bank NatWest. The scheme aims to help children build the knowledge and confidence to manage their own money.

Kirsty Britz, director of sustainable banking at NatWest, says: “Educating young people about money has never been more important due to the variety of ways now available to spend.”

A crucial lesson to learn is how to keep your money safe. Ms Britz says it is vital to impress upon children the importance of looking after their hard-earned cash – explain that they should store it somewhere safe and ask them to double-check that they have put their money away again after they have bought something in a shop.

Opening a bank account may also encourage kids to keep their cash in the bank where it won’t be stolen. It may also reduce the temptation to spend it! She adds that seeing a bank statement with regular deposits and interest payments growing to a large sum is a great incentive to keep saving.

HOLLY BLACK is a freelance personal finance and investment journalist.

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Everyone Gets Free Soft Pretzels This Monday at Philly Pretzel Factory


Every year, I look forward to National Pretzel Day just as much as Stanley looks forward to Pretzel Day on “The Office.” Maybe it’s because my family’s weekend tradition was going to the mall just for something to do, and stopping for soft pretzels was always part of the plan.

And freshly made soft pretzels are even better when they’re free. This Monday, we can all enjoy a free soft pretzel at Philly Pretzel Factory.

How to Get a Free Pretzel at Philly Pretzel Factory This Monday

Philly Pretzel Factory co-founder Dan DiZio started selling pretzels at a busy intersection in Philadelphia at age 11 — and after graduating college, he and his college roommate turned his childhood side gig into a booming business.

Now, Philly Pretzel Factory is celebrating 20 years of serving up “hot outta the oven” soft pretzels with free pretzels for everyone on Monday, Aug. 20. And there is no purchase necessary — your fresh, buttery soft pretzel will be totally free.

Plus, you’ll have a chance to win free pretzels for a year! Just be sure to fill out a ballot card when you stop in for your free pretzel.

And don’t worry: You don’t have to take a trip to Philly to get in on this deal. Although the original Philly Pretzel Factory was started in Philadelphia, there are now more than 100 locations across 12 states.

Jessica Gray is an editorial assistant at The Penny Hoarder. She once celebrated quitting a horrible job by stopping by the mall for a soft pretzel before heading home to watch “Office Space.”

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.



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Here’s Your Month-by-Month Guide to the Best Time to Buy Almost Everything

Are You Right All the Time? How to Earn up to $730/Year Sharing Your Opinions


Are you the kind of person who’s got an opinion about everything? It’s OK, you can tell us.

Do you have a firm stance on whether a hot dog is a sandwich? Or if Mexican food is tastier in California or Texas? iPhones or Androids? Should “The Shape of Water” really have won an Oscar for Best Picture?

Whatever you think, you’re probably right.

If you’re naturally opinionated, we’ve got a place for you: InboxDollars, a website that rewards you for sharing your opinions.

How to Make up to $730/Year Taking Surveys

There are a ton of paid survey sites out there, but finding a legitimate one is a challenge. With so many of these sites, you end up getting bombarded by pop-up ads or emails. Or you’re in danger of getting scammed.

We’ve tested out a lot of them, and InboxDollars is one we know is legit. In fact, it’s run by a company that has an A+ rating from the Better Business Bureau.

It’s one of our favorite survey sites because it rewards you in cold, hard cash. You can get rewarded for taking short daily surveys. If you qualify for and complete all of the surveys it recommends to you each day, you could pocket an extra $730 in a year.

Also, you get a free $5 sign-up bonus. Free money never hurts.

Now, fair warning: You’re not going to get rich doing this. It’s an easy way to make a little money in your spare time.

If you’re waiting in line somewhere, do a quick survey on your phone. Stuck inside on a rainy day? Complete a few surveys.

How to Use InboxDollars

The Penny Hoarder writer Carson Kohler thoroughly checked out InboxDollars for us. Here’s what she found out:

  • You fill out an initial survey to get your $5 sign-up bonus. Once you bank your initial $5, you can start earning additional cash.
  • Navigate to the “Surveys” tab at the top of the webpage. Your dashboard shows surveys you might qualify for (based on your answers when you signed up). Each entry lists the survey topic, the estimated completion time and how much you’ll earn.
  • At the top of your window, you’ll always see your total earnings.
  • You need to earn at least $30 to cash out. Users report that InboxDollars will waive a $3 transaction fee if you wait to cash out at $40.
  • No lie: Getting to $40 takes a while. You can always sign up for offers to hit that threshold more quickly.

That’s how it works. And it’s real money. There are no “rewards points” or anything. If you answer lots of survey questions, you’ll eventually get a real check in your mailbox.

You probably have an opinion about that, don’t you?

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He has so many opinions.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.



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Can Sharia savings accounts provide you an extra return on your cash?

Sharia bank

Sharia banks often offer better rates of returns on cash savings than their non-Sharia-compliant counterparts.

Plus, many – such as the providers below – have Financial Services Compensation Scheme (FSCS) protection. But how do these products work, and should you consider them?

Better returns

While most savings and Cash Isa accounts on the market offer an Annual Equivalent Rate (AER), which is a guaranteed rate of interest, Sharia accounts can’t do this. In order to comply with religious rules, these accounts instead offer an Expected Profit Rate (EPR). This is because under Islamic law, money is banned from generating money (ie, interest), and instead, the EPR is generated from profits made investing in ethical companies.

Tom Adams, head of research at independent savings advice site Savings Champion, explains: “Despite Sharia accounts being very much a fixture in the UK savings market, there is still some confusion among savers about how they work and how they differ from standard savings accounts. This confusion can sometimes lead to savers signing up without fully understanding the accounts or avoiding them altogether – neither of which is ideal.”

The EPR in particular may put off savers, given the rate is ‘expected’ rather than guaranteed. However, Sharia provider Gatehouse Bank says in its 10-year history it has never failed to meet the stated EPR of a product. It adds that if it were to revise the EPR mid-term, it would contact customers and offer them the opportunity to keep the account or close it immediately.

Keith Leach, chief commercial officer at Al Rayan, adds: “Al Rayan has been in operation since 2004 and has always achieved the expected profit rate it has quoted to its customers. On occasion it has even paid more.”

Mr Adams says: “While the accounts are aimed at savers who want a return on their savings without compromising their faith, they can be suitable for all savers. However, because of the different way that the return is calculated, compared with standard savings accounts, you should ensure that you are comfortable with this before proceeding.”

Another factor that may affect savers’ willingness to use these products is worrying about how safe their money is. However, Sharia-compliant banks, such as Gatehouse Bank and Al Rayan, are FSCS protected.

Many Sharia-compliant banks are FSCS protected

Best buys

At the time of writing, there are several EPR products on the market that beat their AER equivalents.

On easy-access Cash Isas, Al Rayan Bank offers 1.36% EPR, while the next best rate is Virgin Money, offering 1.35% AER.

Al Rayan also offers a 12-month Fixed Term Deposit Cash Isa at 1.61% EPR. The next best is Bank of Cyprus, offering 1.55% AER. Al Rayan also has the best two-year fixed Cash Isa at 1.81% EPR. The next best comes from Paragon, offering 1.7%.

Mr Adams concludes: “With competitive rates available, Sharia accounts are worth considering, provided you are happy with how the EPR is generated and paid, and with the provider’s track record in achieving profit rates in the past. Always ensure that providers are covered by the FSCS or equivalent and if you have any concerns, keep within the protection limits.”

FEATURED PRODUCT

Al Rayan Instant Access Cash Isa, 1.36% EPR

Open this Expected Profit Rate (EPR) account from Al Rayan Bank online, by post, in-branch or by phone. The account requires a low initial deposit of £50 and transfers in from other providers are allowed. You can make additional deposits with no minimum amount, up to the annual Cash Isa limit. Instead of interest, the account pays ‘profit’, which is credited to the account on the last working day of each month.

 

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Building Workplace Relationships in a Difficult Environment

Tanya writes in:

I started a new job on June 1. I work in an office setting with 20-25 other people. In the year or so before I started, there was a big “conflict” where a poisonous former employee kind of dismantled the office culture and got everyone to split into factions and many of the people in the office wound up not on speaking terms. While it’s not that bad any more, the office is still a pretty frigid place. No one really talks to anyone outside of work requirements and most people seem to be either just doing their job, browsing websites, or counting the minutes until they can leave. Most people eat lunch at their desks and occasionally they eat out in pairs and that’s it. On the first day several people said hello to me but since then almost no one has spoken to me aside from work tasks.

I want to break through this and start building some good professional relationships but I don’t know where to start. Most conversations don’t seem to go anywhere, like people are afraid other people will overhear as our office is an open floor plan. It’s really weird and most of the advice I’ve seen doesn’t give any insight as to how to handle this. Thoughts? I like the way you handle things.

So, first of all, I believe that good strong positive relationships with at least some of your coworkers is a very valuable thing. Having those relationships makes the workday more pleasant, gives you someone who you feel comfortable solving problems with, and also gives you someone who can potentially help you at a later stage in your career. It is well worth the time to build these kinds of relationships because they will pay off in terms of stabilizing your current job, potentially helping you line up for raises and promotions, and supporting your career later on.

I’ve been in wonderful open office environments where everyone gets along well, and I’ve also been in “cold” environments like the one Tanya is describing here. In both cases, I’ve managed to build relationships with coworkers, some so strong that they persist more than a decade after I switched jobs and career paths.

Here are ten strategies I would use if I were in Tanya’s position, in an office environment with very little camaraderie.

Make Cookies

This is a great initial strategy that you can do any time that almost always works well. Just make a big batch of homemade cookies and bring them into work and offer them to everyone. “I made this batch of cookies to share. Do you want one?” Keep the recipe simple – just straight up chocolate chip – so that they’ll appeal to the maximum number of people. Here’s a great simple chocolate chip cookie recipe.

This is a strategy that a friend of mine that I’ll call Jane uses to incredible effectiveness. Whenever she goes to a meeting, she brings a box of her cookies with her half the time. She brings them to her workplace. She brings them to dinner parties.

Why? She directly told me once: “Cookies are conversation starters.” They get people to let down their guard just a little bit and start communicating. Almost everyone can eat a cookie without any allergen issues, so that’s usually not a worry, and a small cookie is tasty and isn’t going to nuke anyone’s diet. Then, there’s something about munching on a cookie that just opens people up for conversation like nothing else.

Just make a big batch of cookies, enough for everyone in your office to have a couple, and take them to work the next day. Just say loudly to everyone that you made a big batch of cookies to share and walk around sharing them with people. While you might not get instant conversation, what you’re likely to get is a bit of warming towards you, and that will make many of the other strategies listed here.

Don’t want to make cookies? Find something else you’re comfortable making that’s easy to share. At my last office workplace, one new person brought in a slow cooker full of rømmegrøt (a Norwegian pudding that tastes like a liquid cinnamon roll if you put a bit of cinnamon on it) and everything needed to eat it. She set things up and invited everyone to come and try some. There are few things in the world that are a better icebreaker than food.

Identify “Linchpin” People

Spend some time watching and observing your coworkers and figure out who among them seems to have the most positive interactions with others. Is there anyone in your office who seems to get a bit more of a response than others from conversations? Is there anyone who more consistently eats out with others, and eats with different people in pairs (as Tanya describes)?

Look for at least one person that matches this description, and ideally find a few that do.

This requires time and observation. You’re going to need to watch and listen for at least a few days to figure out who’s who in your workplace.

The people you are looking for are the linchpins in what remains of the professional network in your workplace. They’re the ones that have good relationships with at least a handful of others at work and, although the workplace might not be all that it could be, these are the people that go beyond simply sitting at their desk all day and seem to have at least some connection to others.

These are the people you start with.

Invite a “Linchpin” to Lunch

Once you’ve identified a few “linchpins” that others seem to hold in positive regard, invite one of them to lunch. Just be honest – say you’re trying to understand the dynamics of what’s happening in the office and you’ve seen that this person seems to have a good connection with a lot of people and that this person will probably have some insights.

Pick up the tab for that lunch. While there, get that person’s take on what’s going on in the office. Who are the people that are helpful and collaborative? Who are the people who aren’t?

Then, do the same for everyone you identify as a “linchpin.”

What you’ll eventually learn is that there will be a subset of people who are consistently defined as good collaborators and good people, and a (likely) smaller subset of people who are consistently defined as bad collaborators and bad actors.

In general, it’s a good idea to actively start building relationships with those people who are being collectively identified as good collaborators and good people.

The problem with a “cold” office like Tanya describes is that it’s very hard to pick up on cues at work to identify who’s who. That’s why identifying the people who are strong social connectors and then blatantly asking them for help can be really useful. In a normal workplace, you can usually figure out for yourself over time who the good and bad actors are, but in a cold office, you may need help.

Talk to Your Supervisor about Collaborative Work

While the “linchpins” – the good social connectors – are great people to know and have positive relationships with, you’re also going to want to have a reason to work closely with the people who are good collaborators and all-around good people.

The way to do that is to jump into projects with them, if at all possible. If you can, identify what projects those people are working on and, when there’s an opportunity, get involved with some of those projects so that you have more opportunity to work with good collaborators.

Pay attention in meetings and other forms of workplace communication. Look for projects or other opportunities that give you a chance to work with the good collaborators, and then jump on those projects and opportunities. Don’t be afraid to directly talk to your supervisor about them, either.

I’ll give you a personal example of this. Over time, I learned that one particular person that I used to work with – we’ll call him Trevor – was a really good team player and almost always helped projects to succeed by identifying what needed to be done and who could do it. Even when he wasn’t a project lead, he was kind of a natural leader and many issues just went straight through him.

I made an effort to get involved in a project with this person so that we would have to work together. We clicked – he helped me and I helped him more times than I can count. A decade after I left that job, I still talk to Trevor.

Engineer “Grassroots” Fun, Not Organized Fun

Many offices that are “cold” will have “fun” activities that try to bond people together that often fall flat because they feel forced. That doesn’t mean that the idea of having a shared fun activity isn’t a good one – it is – but that the execution is bad.

The fun activities that really work well are the ones that come from the people themselves, not from management.

I’ve seen several things that work well in office environments, but one of the best things I’ve ever seen is a fantasy football league. I’ve seen a fantasy football league, organized by one of the people in the office, make a huge difference in terms of bonding people in that office on multiple different occasions.

It’s pretty easy – just suggest to the people in your office that you’re looking for some people for a fantasy football league and it’d be nice to actually have some players in the office so that they can negotiate trades directly when needed. Managing a league using the tools at ESPN or Yahoo is easy; the software does pretty much all the work for you. This gives you a strong communication channel with others in your office without being a direct demand on their time or attention.

Another way to do this is to ask for some kind of collaborative help that’s really easy for other people to pull off. Maybe you’re trying to make a collage and need some old magazines – just ask coworkers if they can bring in some old ones. Maybe you’re making a t-shirt quilt and want some old t-shirts – again, just ask coworkers to bring some in. The purpose of this isn’t so much the stuff you collect, but in the collaboration and connection that comes when they do.

Take Advantage of What You’ve Got

These efforts are going to build to situations where you’re engaged in meaningful conversation with a coworker. When that happens, use every conversational tactic in the book to make that conversation into a positive.

I have something of a checklist that I’ve been working with my kids on in order to help them be better at conversations, so that you both get value out of it and both end up in a more positive place. Here are some of the highlights.

Stop thinking about what you’re going to say next, and instead listen to what they’re saying and respond to that. Quite often, in conversations, people spend the time when other people are talking simply formulating what they’re going to say next. Rather than doing that, listen to what the other person is saying and respond accordingly.

Ask questions, and mostly only offer statements when asked. This is such an effective conversation tactic when you’re uncertain. Just ask questions, listen to the answers carefully, and ask good follow-up questions. In general, the only time I offer up statements in conversations where I’m not surrounded by good friends is when I’m trying to articulate a conclusion or I’m answering a question that I’m asked.

Have a reason to follow up. The best conversations leave some sort of trail that you can follow up on, whether with more information or some other form of support or simply a check-in on how something is going. The key is to remember to follow up. I usually make a note of many conversations reminding myself to do just that, and it’s through that pattern of following up that relationships are built.

Listen. That’s the key. Listen. Don’t fill things up with your words. Listen. Pay attention. This is the core.

Avoid Negative Gossip Like the Plague

If you encounter anyone saying negative things behind another person’s back, avoid it like the plague. If you’re in a conversation, don’t agree with what’s being said and instead wait for the conversation topic to change or change it yourself. If you’re nudged into offering input, just say something neutral, like you haven’t really seen that behavior or that it’s not a big deal, and move on.

Quite often, the negative talk you do about someone behind their back gets back to them and will poison any relationship you might have with them. Furthermore, some bystanders will begin to see you as a negative person and someone who shouldn’t be fully trusted.

Yes, some negative gossipers manage to build circles of similarly negative people around them. Those groups are almost always disastrous in the workplace, and if you find such a cabal, it’s probably a good idea to move on to a new job as discreetly and quietly as you can.

How does this come up in a “cold” office? It’s likely that when you meet with some of the “linchpins,” you’ll hear some negative gossip about people. Don’t assume it to be true. Instead, just don’t participate and seek out others to build relationships with.

Be Appreciative of Help

Through the above methods, you’ll probably come into some situations where someone helped you with something at work, whether it’s direct help with a work task, really good advice about something, or help with something outside of work (like bringing in something for a personal project at your request).

Be appreciative of that help. For me, nothing quite beats a handwritten thank you note and a small gift, like a bundle of cookies in cellophane or something like that.

Go to the store and buy a bunch of blank thank you notes. Look for situations where someone really helped you out, with advice or with collaborative work or with helping with a personal project, and write that thank you note. Including a little gift with that note – something small, but something clearly tied to their interests (and probably consumable) – is always a good idea.

The format is simple. Just write their name – “Dear Jeff,” – followed by a direct thanks for what they did – “Thank you for giving me such useful advice last month.” – and how that thing really helped you – “It helped me figure out what steps I need to make in my career.” – and a final appreciation – “I really appreciate it!” – and a signature – “Yours truly, Trent”. That’s all you need to do, just do it in your own handwriting.

Devote Some of Your Day to Building Relationships

Over time, you will start building relationships with people. One good way to keep building those relationships over time is to maintain regular direct one-on-one contact with people. Don’t just broadcast to the room, but connect with people individually.

There are lots of different ways to do this. One great way is to connect on social media by following them on Facebook or LinkedIn or Twitter, then following up on some of their content with a “like” or a comment or an answer to a question they’re posing. If they don’t use social media, shoot them an email once in a while sharing something you thought they might find interesting or just checking up on how they’re doing. Stop by their desk when there’s a good opportunity just to check in on them. A regular one-on-one lunch or small group lunch is a good idea, whether it’s a lunch outside of the office or you just go off somewhere to brown bag together somewhere nearby.

Put aside some time each day to do these kinds of things. Keep those relationships alive and nurture them a little. It’s like watering a garden. It doesn’t take a whole lot out of you, but it’s essential for keeping those things alive and growing.

Produce Good Work

This is the foundation of everything else I’ve written in this article. Produce good work and a lot of these things will be much easier. If you produce good work, people will recognize it. If you’re reliable and get things done when you say you will, people will recognize it.

You’ll build a positive professional reputation in the office, which is far better than a negative reputation formed from not getting things done.

Don’t pass the buck. Do what you’re expected to do, and if you need help, give some help, too. If you fall into a pattern of handing your work off to others, resentment will build and your office will be colder than ever.

What if you’re struggling mightily with something? Ask for help. You are far better off asking for genuine help with a problem you’re having than to just push it off or not finish it. Make it clear that you don’t want someone to do it for you, but instead help you get to the point where you can do it yourself.

Produce good work, and be a good collaborator. You’ll never, ever go wrong with that.

Final Thoughts

It takes time for these things to work. It won’t happen overnight or even in a month or two. Thawing a cold office takes time.

Having said that, thawing a cold office is something that is really beneficial for everyone – not just you, but literally every person in that office. The ability to build good workplace relationships that you can rely on when work needs to be done or life intervenes is a incredibly valuable thing for anyone to have. These tactics will help get that process started, but don’t expect magic results overnight. You’ve got to give it time.

Good luck!

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The 9 Most Absurd Myths We’ve Ever Heard About Credit Scores

Handling Insurance on an Old or Historic Home

Insuring an older or even historic home is a profoundly annoying task up to the point that you need that insurance.

I live on a two-acre farm that dates back to 1851 and still includes a chicken coop, goat shed, potting shed, potato shed, smokehouse, outhouse, well house, detached garage, and 5,000-square-foot German-style barn. It is one of Oregon’s original homestead farms and is just blocks from where pioneer Joseph Meek first settled in 1841. It sits on just two acres of the original 640, but it is both an Oregon and national historic site.

It is also very fragile. On April 7, 2017, a storm came through the area with sustained winds of 60 miles per hour or more. That wind got into a small opening along the southwest corner of the barn and peeled a section of the barn’s western wall right off. It took siding, windows, and beams, but it was also strong enough to push one of the barn’s corner beams right off of its concrete support, exposing a whole lot of rot beneath. Immediately after seeing the damage, I called out insurers at USAA.

Four years earlier, that company was not all that keen on insuring us. My wife is part of a military family, and she tried to get a mortgage through USAA, only to be told at the last minute that the company wouldn’t insure a farm. However, since her family had used them for homeowners insurance for decades, we asked them for similar considerations.

They sent an inspector to the property and had no problem insuring the home itself. The outbuildings, however, gave them some concern. They demanded we apply new paint to the goat shed and smokehouse to prevent water damage. They also wanted us to re-shingle the roof of the potato shed, which was in desperate need of repair. Finally, they asked us to build a fence around a set of stairs that led to a basement dug beneath the house in the early 2000s, saying they wanted us covered in case “some neighbor kid” came onto the property and fell into the stairwell. We obliged, sent pictures, and received word that they’d cover the house and all the outbuildings.

This was not necessarily a given. A friend in Quincy, Mass., had gone to USAA for insurance on his 1920 Colonial home, but was denied when the Texas-based company read the inspector’s report that found old knob-and-tube wiring. My friend later went with a New England-based company that was unfazed by that particular feature.

But USAA did right by us and sat in the background during five years of relative silence on the farm as we paid roughly $1,500 a year in premiums. After the windstorm, however, they recommended we find a contractor who would be familiar with the kind of property we were repairing. We’d just spoken with the Restore Oregon historic preservation group and had brought them on a tour of the barn a few months before. After I called them in a panic, they recommended five different companies and individuals for the job. Of those, just one — Arciform in Portland — was available to do the work.

They came out to have a look and told us their recommendations for fixing the corner post, a sill beam running across the front of the barn, the wall supports, siding, windows, and flooring that had been damaged by the storm. By April 17, USAA had an inspector out to our property and, by April 28, we received $5,000 to shore up the exposed barn and work up plans.

But just having an insurer by your side when fixing a building like this isn’t enough. There was constant communication through phone calls and through USAA’s claim site clarifying how much we had to work with from our outbuilding coverage ($53,300), what other coverage was available to us ($15,990 in multipurpose “home protector” coverage and debris removal costs), and what we could and couldn’t do. Arciform sourced lumber from a mill in Montana to match original saw patterns, attempted to use nails, bolts, and hardware similar to what was used on the barn (though the original square nails were hard to come by), and trenched out the ground around the barn to expose supports long covered by gathered soil.

The first payment, however, didn’t arrive until July. Unfortunately, because a payment of that size has to be mailed to the mortgage company first, endorsed, and then sent back to the contractor on the mortgage company’s timetable, we weren’t able to get onto Arciform’s schedule until fall. Even then the mortgage company demanded an inspection at the job’s halfway point before the first half of funds could be released, then again when work was 90 percent complete. We complied, and work reached the 90 percent mark in late November. We called in for our last inspection, it was performed and submitted, but a worker at the mortgage company in Cleveland flagged it for having lumber that didn’t look like the rest of the barn. After the inspector informed him that we could never paint the barn to look like milk paint and more than a century of weathering, he finally released the full payment to Arciform.

On January 8 of this year, USAA sent the project’s final payment. The mortgage company approved it and Arciform received its last payment. There was enough left over for Arciform to install a downslope dry well in front of the barn to collect drainage and ensure that water damage would never exacerbate damage from a windstorm again. It took roughly 10 months to get the barn back on its feet, and that was with a supportive insurer and the right personnel in place.

It could have been far worse with none of the above. We’re still with USAA today, but the experience gave me some insight into what my wife and I likely should’ve been looking for in an insurer and in coverage:

  1. It made us aware that any damage to the barn greater than that likely would’ve required more coverage than we had. USAA has expanded coverage, but we may consider shopping around for insurers who are similarly acquainted with properties like this one.
  2. It made us realize that we should have asked more questions about what our “other buildings” coverage actually covered. Did it cover complete restoration or did it cover basic repairs or replacement?
  3. It made clear that you should ask your potential insurer questions about their homeowners’ coverage before an inspector gets there. Are they familiar with older homes? Do knob-and-tube wiring or older outbuildings give them cause for concern?
  4. Finally, it made us aware of just what a precious resource we’ve been entrusted with and just how worthwhile it is to get that coverage right.

When my parents visited for Christmas, my stepfather went for a walk around the neighborhood and got lost. He flagged down a police car and described our farm to the officers. The officer driving the squad car told him to relay a message: That he was glad we saved the barn and that he and his family have driven by it regularly for decades. After my parents left, we received a Christmas card from neighbors a few blocks away thanking us for rebuilding the barn and telling us how many family photos they’d taken in front of it over the years.

While not every older home has that kind of support from the surrounding community, they all require at least a modicum of emotional attachment from the owner to make all of the maintenance and upkeep worthwhile. You’re insuring your home and perhaps that of your family, but you’re also insuring that your home’s legacy continues to the next owner. That’s something worth considering when you decide just how to insure that old house.

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