Ask the grumpies: Aftershock

Linda asks:

The book description of Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown notes: “From the authors who accurately predicted the bursting of the global bubble economy comes the definitive look at what lies ahead in 2013 and beyond.”

My reading of this book is summarized thusly: there are still more economic bubbles yet to burst and the global economy is “evolving” and not just “cycling” up and down. The authors acknowledge that it is very hard to accurately predict when this big “afterschock” will hit us. They recommend some employment and investing strategies that they say will help one better ride out the “aftershock,” although they note that one could lose some big returns if one shifts assets too early. The principal author is an economist, but he sounds very critical of economists in general.

The book was an easy read (maybe because there was so much repetition) and it appeals to the part of me that is always concerned that in my lifetime our society will become increasingly dystopian. (Could it be that I’ve read too much Margaret Atwood and Octavia Butler?) I’m wondering if true academics such as yourselves have a different opinion or general guidance on what to read to balance out the hype of this Aftershock idea.

Somewhat related: if one had a chunk of cash (such as from the sale of a home), what are the better options for saving or investing it for a short term (2 to 5 years)? I’m starting to think about what to do with the equity I’ll get when I sell my house later this year for my big move to the Bay Area, hence my unusual interest in investing and PF books. I will also be meeting with my (fee-based) financial adviser, but I like to have some ideas to discuss with him first.

 

Lots of economists were talking about the market crashing before it crashed.  I don’t think anybody really understood the *extent* of the housing crisis, but we all knew it was unsustainable and going to crash.  Ditto the earlier tech crash.  We’re actually pretty good at seeing bubbles but nobody knows when exactly they’re going to pop, probably because there’s an element of chaos theory there.  The bubbles in my lifetime have seemed to grow bigger than possible before inevitably popping.

With the current lack of regulation, of course there are going to be more bubbles.  The system is still set up for bubbles.  Government has to interfere for there to be no bubbles (as it did after the depression and again after the S&L crisis in the 1980s), but there’s a lot of money to be made in bubbles and the people with money are the people in power these days.

And yes, the US is growing increasingly dystopian.  This depresses me because I grew up thinking it would get better.  Two steps forward and half a step back.  But income inequality has been broadening and things have been getting worse for the poor.  There’s a lot of bad stuff that happens when income inequality gets bigger.  Very depressing.  (I voted for Al Gore, and I like to think in some parallel universe things are better.  More likely though there’s a backlash in that universe and the inevitable was just delayed a couple of decades.  *sigh*)  One of my (libertarian) colleagues is always saying, “Bread and circuses” and forecasting the downfall of civilization.  I hope he’s not right.  I still have the little fairy of Hope in my heart.

So, what to do?  Well, the standard advice *still applies*.  Bubbles mean you need money in stocks.  Bubbles popping mean you need money in bonds.  We can’t predict when a bubble is going to pop or how big it’s going to get.  So we diversify.

Investing for the short term is the same standard boring advice as well– if you’re going to need the money, put it someplace safe (with lower returns).  Bonds, laddered CDs, etc.  If you feel like gambling, put it in the stock market.  (Because houses in SF are so very expensive, and it’s generally a seller’s market, plenty of folks keep that “short term” money in the stock market rather than pulling it out.  When tech bubbles burst, so do housing prices in the SF bay area, so it isn’t quite as big a risk for them, but that’s a very unique market.)

Even if we go into hyperinflation, you’ll need money in stocks for the long-term.  If society collapses, then probably you’ll need bullets and bottled water more than anything else.  But it’s hard to say.  We’re not prepared for a zombie apocalypse.

Ask the grumpies: What to do with a lump sum?

Susan asks:

I’ve just finally unloaded my own slice of the housing crisis (PHEW), a condo in another place, and have been wired the proceeds, which are between $50 and $100k. What’s the best thing to do with that lump?

My only remaining mortgage (PHEW) is the house I live in. It’s for 80% of that house’s value, at 3.4%, and the monthly nut is reasonable, at ~30% of take-home. I have decent? retirement savings between IRA, investment and TIAA-cref accounts, about $70k (I’m 41). My car is paid off, and I have no CC debt or student loans. There are some upcoming expenses for the house that are within our planned budget. We do not have children and do not plan to.

I feel burned from the housing crisis (yet I know it wasn’t as bad for me as others). The proceeds represent my initial investment, so I came out about flat, although that money was locked up (or, circa 2009, nonexistent) for almost 10 years. Because of that, I’m hesitant to pay down principal on my current mortgage, more than the 20% we already have in there. But 2008 wasn’t so kind to investments, either. I know I don’t want to leave this money in checking or my 0.5% savings, so – where does it go?

Standard grumpy disclaimers apply:  We are not financial advisers.  Talk to a fee-based financial planner and/or do your own research before making any life-changing decisions.

You have a few good options.  Three of them jump to mind immediately.

1.  Put more money into retirement
2.  Pre-pay your current mortgage
3.  Put the money in taxable stocks

I do have a quibble with the last paragraph if your question.  Pre-paying the mortgage *can* provide cash-flow liquidity.  If you’re willing to reamortize (aka re-cast) the mortgage, then you can lower your monthly mortgage payments by re-extending the length of your mortgage if you have prepaid a significant amount.  You can do this even if you’ve lost your job, generally for the cost of ~$250.  Only if you’re willing/planning on foreclosing on your house would it make sense to never pre-pay under any circumstances, but since you didn’t foreclose on the condo, it’s unlikely that you’re in that situation.   The *debt* is what you should be focusing on, not the value of your house.  You will have the debt no matter what the value of your house is (absent willingness to foreclose, of course).  Pre-paying here is the safest option– the low risk, low return option.

Your interest rate on your house is pretty small, so it’s not obvious you should pre-pay the mortgage.  With a higher interest rate, it might tip your decision to the mortgage if doing so meant you could refinance, for example, and it would be a safe investment (assuming no plans to foreclose) and would allow you to decrease your monthly nut by reamortizing in the case of an emergency.  In this case, the return is pretty low and this is something you’d only think about doing if you wanted a safer option.  The return is higher than CDs or savings accounts, but you wouldn’t necessarily be able to get all your savings out in case of an emergency (because home equity loans tend to dry up when you actually need them), just enough to give you a somewhat lower monthly payment with re-casting discussed above.  [Note, too, that the earlier you pre-pay the bigger the benefit of prepayment-- you can play with the numbers using the GRS amortization calculator.]

You should think about how quickly you will want this money.  It sounds like you don’t have any major plans for expenditures that you can’t handle.  However, how are you feeling about job risks over the next 15 years or so?  Is there a chance that you or a spouse could lose income?  Is there a chance that you’ll want to move to a more expensive locale?  If you feel pretty secure on that, then putting the money away in a tax-advantaged retirement fund is going to be better than just putting it into the stock market because you will save money on taxes.  However if you see a chance for needing more liquidity, then you would want to tilt towards regular stock investing (keeping in mind that IRA Roth contributions can be taken out tax-free even if their earnings cannot, so they have added liquidity).

You should also think about whether or not $70K in retirement accounts at age 41 is putting you on track for retirement or not.  My druthers is that you could add more to that, but I also don’t know about your lifestyle and your planned expenses, your work situation, etc.  There are a lot of retirement calculators out there with various inputs that you can play with to get a better picture of how much you think you’ll need going forward.  It is unlikely that you have saved too much at this point.  (And if you have, you can always cut down on the retirement savings later.)

If you choose one of the two investing options, what stocks to put it in?  Broad-based low-fee Vanguard index funds if possible.  VTSMX is a good one if you just want diversification, but there are other combinations you can make with VFINX, VGTSX and so on.  You may want to throw in some bond fund, such as VBMFX.  And ask about their admiral fund shares if you invest with Vanguard directly.  With TIAA-CREF you’ll want to talk to an adviser to get numbers on fees for their broad-based indexes vs. their target-date funds.  We can go more into detail on these if you want to add more information about your options.

Personally I like having a secondary emergency fund in taxable stocks (and/or in IRA Roths) that I feel like I could tap by selling off stocks.  So far we have left ours untouched but the fact that it’s there (even when it dropped down to its lowest point in the recession– it has since more than doubled!) always made me feel more secure.

What I would do in your scenario would be to max out all the retirement accounts that I could (and given the sale, you may want to check with a tax accountant or other expert before putting money in the IRA), and put the rest into taxable stocks or (less likely given your situation) mortgage prepayment.  For the retirement accounts, I would either pick some broad-based indexes with low fees from TIAA-CREF, or I’d pay a little bit more in fees to get their target-based fund.  (Their target-based fund isn’t a no-brainer like Vanguard’s is, but if I didn’t want to sit down and create my own diversified sets of funds, I’d go for it.)

But again, you’ll have to think about what your short- and long- term goals and uncertainties are.  The best thing to do will vary based on your needs.  For shorter-term safety but low return:  prepay the mortgage (knowing your can re-cast for a lower monthly payment later, should you need to).  For longer term safety and the highest rewards:  max out your retirement options.  For a secondary emergency fund and somewhat risky growth (which will be correlated with the economy, as you note, but not necessarily your personal situation):  put it in Roths first and the stock market second.

Grumpy Nation:  What advice would you give Susan?  Are there other things she should be considering in this decision?  Bonus points if nobody mentions landlording as an option.  Unless Susan *really* wants to landlord.  Which we doubt.

Ask the grumpies: Retirement vs. debt

Rented life asks:

If you have credit card debt should you pay that off completely before setting up and contributing to retirement? (And does your advice change is the employer doesn’t offer a plan and your retirement is just whatever you set up?) My friend thinks you should pay off credit card first, no matter what and then when that is gone you can start saving for retirement. I feel that can do more harm than good, waiting to set up retirement until your debts are gone might have you setting up really late or possibly always having to push it off. Who is “right?”

If you get an employer match that is anywhere decent you should absolutely save for retirement up to the match before paying off the credit card.  In fact, depending on the match rate, your credit card interest rate, and penalties, there can be situations in which you would put money in, get the match, then take your original money out minus the penalty and you would still be ahead.

If you’re young (with a lot of earning years left), have high interest debt, and have lousy options for saving for retirement at work (no match, high cost plans at work, etc.) and can (and will) knock out that debt really quickly, and will definitely start putting money away for retirement as soon as you’re done with the debt, then go ahead and pay off the debt first!  This is, in fact, what DH and I did when we got married.  We paid off his (relatively high interest rate) student loans first and were still able to max out our IRAs the next fiscal year.  We benefited more from those 6K getting rid of the debt than we would have putting them in an IRA (especially since it would have been a market peak!  But we didn’t know the tech bubble was going to burst, so that was just luck.)

After those two easy scenarios, there’s a lot more grey area.  And it’s going to depend on your personality and your options what you do.  You will have to sit down and run the numbers, think about the risk, the benefits, and your own personality.  The goal is not necessarily to make the most money on paper, but to get rid of your debt and have enough saved for retirement.  It is far better to make a little less money on paper if it means you’re going to make more money in reality because you actually stick to your goals instead of giving up.

If you’re really bad at doing multiple goals at the same time and you would have to save for your retirement manually (and you don’t get a nice match), then go ahead and focus on the debt.  However, even if you’re bad at doing multiple goals at the same time, if you have retirement through work, you can usually have it auto-deducted so you don’t even think about it.

Similarly, if you know deep down that as soon as your credit card debt is gone or down, you’re just going to spend again until you’re back in the same situation you were in before, put money away for retirement so you can’t touch it.  We don’t understand people who can’t keep from maxing out their credit cards no matter how much they make (and we try really hard not to read their blogs because they’re so depressing), but if that’s you, then you need to contribute the max to your retirement accounts in a way that it’s auto-deducted without you even realizing it’s happening.  That way you can continue to pay off your debt in your 60s, 70s, and 80s, or at least still have something to live on when you’re old after declaring bankruptcy multiple times (as retirement money is protected).

Speaking of which, if you have plans to file hard-core bankruptcy, max out that retirement.  I’m not sure what you should do if you’re planning on doing the lighter kind of bankruptcy… you should probably talk to a lawyer about that.

If your work offers good plans, that’s more attractive than if it offers bad plans.  But, as you note, even if your work only has bad plans, you can still invest up to the IRA or Roth IRA limit with Vanguard.  However it’s more difficult to set up auto-deduction before you see the money than it would be with work, which may interact with your personality type and how many goals you can focus on at the same time.

If you aren’t going to remember to set up auto-deduction for retirement just as soon as you get out of debt, then do it right away when you’re thinking of it instead of paying off debt.

If you are going to be in debt for a long time, then it might also be worth investing in the stock market just to add a little bit of risk to your portfolio, or, as mentioned before, to protect your future self in case of bankruptcy.

There’s probably even more scenarios that I’m not thinking about.  But no, I don’t agree that you should always pay off high interest debt first while ignoring retirement (*especially* if you’ve got a 100% match at work!), nor is it always the best idea to contribute the max to retirement while you’re still paying off high interest debt.  (Heck, if you work for the government, the max you can contribute to tax-advantaged retirement savings might be a lot more than 20% of your income!)

What say you, grumpy nation?  High interest debt?  Retirement savings?  Both?  Neither?  Is it always clear-cut what you should do?

Ask the grumpies: Kindergarten skillz

Becky asks:

I wanted to ask – what is the “minimum” I am supposed to do to prepare my four year-old for kindergarten? He has all the basics, I think (can count to 20, does some simple addition in his head, knows the alphabet, recognizes letters, their sounds, and associated words). I have taught him some French words, and he knows a lot of Spanish from daycare. He just started printing practice, but he is not that fond of it! I have the starfall apps and we’ve started looking at them, but I often feel like a slacker Mom in this department. Thoughts? He is currently in the uni childcare, no preschool, so the teaching falls to us.

What do you really need for kindergarten?

1. potty training (some accidents ok)
2. self-feeding (hands ok)

Unless you’re going to a fancy highly competitive coastal k, your kid is already ahead and would be ready for 1st grade in much of the country, skills-wise. If it is half day k, you might be able to get away with no self feeding, but that would be a little odd.

Ideally your child will also be able to sit still for reasonable periods of time, will listen to the teacher, takes instruction, and plays relatively nicely with others.  Mostly being able to put shoes and jacket on are also good things, and to pull pants etc. back up after going potty.  These are skills that most children who went to almost any kind of daycare have.  But there’s still kids who stayed at home who aren’t used to not being the center of attention, and they learn those skills in kindergarten rather than coming in with them.

It doesn’t hurt to know numbers, colors, letters, scissors, patterns, printing, etc. but those should happen in kindergarten or first grade if your child doesn’t get them before that time.

Competitive kindergartens with tests and so on, have a lot more requirements, but they only exist in NYC and a few other places.  There’s an entire industry that exists just to fake these exams out, so a little Googling and maybe a book purchase or two can help for those in that situation.  But for the majority of us, it’s ok to just make sure the kid is out of diapers.

Grumpy Nation parents, what did your children need to know/already know before kindergarten?

Ask the grumpies: 401(K)/403(b) loans

Dr. Koshary asks:

I was talking with my financial consultants – my father and stepmother – last week, and they floated an idea to me that had never crossed my mind before.  They suggested that, if and when, FSM willing, I land a tenure-track job and can look forward to a steadier income, I should borrow a sum of money from my 403(b) and use to pay down my student loan debt.

I immediately disliked this idea, thinking of your observation that, in the grand scheme of things, student loan debt isn’t necessarily the worst thing to carry for a while.  I have around $23,000 in fully subsidized student loans, consolidated at a fixed APR of 5%.  I’m three years into a 20-year repayment plan, so after another 17 years, the loan will be fully repaid, and I will have paid a total of about $41,000 with the yearly interest.  My monthly payment is $173.18, which hardly seems onerous compared to what could have been.  As long as I can avoid any huge unanticipated expenses – or more likely, once I pay off the credit card debt from moving to wherever my next job might be – the student loan is the only debt that I carry.

My parents replied that since that APR over 20 years makes me pay considerably more than the value of the original loan, it would be worthwhile even to take out, say, $10,000 and make a lump-sum payment that would shrink the balance and, therefore, save me some years of interest payments.  According to them, I would then have to go on a repayment plan to my 403(b) alongside the Stafford repayment plan.

The thought of having more unavoidable automatic deductions than necessary turns my stomach, but of course, I don’t yet have a t-t job.  I guess I can understand their logic here, but I don’t have a clear gut instinct what would be best.  Looking ahead, assuming that I might someday have other long-term debt like a new car or a mortgage, what do you suggest?

Disclaimer:  We are not financial planners– talk to a real one about this idea, and a good one (fee-only etc.) if you decide to go forward with it.

Even if you don’t end up with a TT job, you will probably end up with a real job that gives real benefits and a healthy salary.

Our first instinct is NO Don’t do this.  The thing about 401K loans (403b if you stay in gov’t or nonprofit employment) is that if you leave/lose your job, you have to pay them back immediately.  This is only the kind of thing you want to play around with if you already have the money in your savings account just sitting there.  But if you have that money just sitting there, why not *use* it?  It’s not like savings rates or cd rates are particularly high these days.  The worst case scenario sees you declaring bankruptcy.  The best case scenario saves you a little money in interest.

Some other wrinkles if considering bankruptcy as a future option:  It is difficult (nearly impossible) to discharge student loan debt in bankruptcy, so if you’re going to go bankrupt, getting rid of that before other debt might make sense.  However, retirement accounts are also usually protected in bankruptcy proceedings (IRA exemptions are limited, but 403b are unlimited), so taking money from retirement isn’t such a good idea either if you’re planning on a bankruptcy.

5% is pretty high for student loan interest.  That’s not a fun debt to be carrying around.  But it’s also not credit-card levels of interest.  Your monthly payment seems doable, so it’s unlikely to put you into hardship scenarios as long as you’re making enough to pay your rent and feed yourself.  Yes, you’d save money long-term paying it off, but at that level we personally wouldn’t consider adding the risk that comes with 401K loans to do that.

Better:  Once you’re employed with a real job, increase your student loan payments.  That will save you interest and it will decrease your risk down the road.  It won’t save you as much money long-term as paying it off immediately with a 401K loan would, but you also wouldn’t be dependent on your job and your employer either.  If you were stuck in an untenable working environment or if your job were eliminated, you wouldn’t have that huge 401K/403b repayment to make.  At that point you would just stop making the extra student loan payments.

It’s hard to give direct advice for the scenarios with cars and houses without having the numbers.  We will give the standard advice however:  Once you’re employed, contribute to retirement at least enough to get the employer match.  If you can handle it, save 10-20% of your income (including their match) in your work retirement account.  Don’t buy a house unless you have 20% down.  Don’t buy more house than you can afford (and don’t believe the bank calculators about what you can afford– they estimate high).  Don’t buy more car than you can afford (unless the minimum safe option necessary to get you to work is more than you can afford).  Hold on to your car until the maintenance expenses are bigger than the cost of the car, or longer.

We’re betting though, that you’re going to end up getting a non-academic job that will make 23K seem pretty trivial.  (23K is a LOT of money when you’re not making much, but it’s not as bad when you have a high-level salary, so long as you’re able to control your discretionary spending.)  Here’s what we see happening in that scenario:  1st paycheck goes towards moving expenses, living expenses, and a spiffier work wardrobe (as required by work).  2nd paycheck your retirement account on the new job kicks in, you pay extra to your student loan and finish up your remaining moving/living expenses.  Sometime over the next few months you knock out that student loan and start saving for a house and/or new car.  Hopefully your car lasts long enough that its replacement can be paid for in cash.  After the loans are gone and your targeted savings accounts are started and you’ve accrued a couple weeks of vacation, you take a nice relaxing vacation.  When your car finally gives out you replace it.  In a year or two you’ve saved enough for your own condo or townhouse.  Or you’ve found someone to share a house with, get married, and live happily ever after.  If you end up with an academic job, you may decide to start those targeted savings accounts before paying off the loans because it’ll take longer to pay off the student loans.  But you also won’t be spending so much on wardrobe and your expectations will be lower in terms of quality of life.

Grumpy nation, what are your thoughts on 401K loans to pay off student loans?

Ask the grumpies: Tv for toddlers

Dana asks:

My son just turned two years old and had his first television experience watching the movie “Cars” on my laptop. He mostly watched in 5-7 minute chunks as his attention span isn’t very long and he is very active. We aren’t sure what to let him watch next.  I think his attention span might be up to 15 minute TV shows and was wondering if you had advice for shows your kids liked as toddlers that aren’t too painful for parents to watch too.  Obviously not looking for violence and educational is a plus but not required.

Well, this is going to vary a lot, so check the comments for what other two year olds are watching!

DC1 was really really into frogs, so the LeapFrog dvds (particularly the early ones on phonics) were super popular at Casa Grumpy.  Dora the Explorer, also popular.  Closer to 3 ze picked up Caillou (one of DC2’s current picks) and Kipper and Blues Clues and Word World (though many parents dislike Caillou because in the earlier episodes he’s kind of a brat).

In addition to PBS Kids, where DC2 prefers Curious George, DC2 has just discovered Youtube, which has many kids tv shows uploaded to it.  Ze is currently a big fan of:  Dora the Explorer, Pocoyo (these are nice because they’re short!), Peppa the Pig, and a bunch of seriously annoying children’s shows made for Youtube.  The best of these (from the not annoying the parent perspective) is Miss Tracey singing nursery rhymes.  The worst of these is Mr. Mike doing the same thing but with his own twist.  (Licking up the baby bumblebee?  Seriously Mr. Mike?)  In between are: Mother Goose Club and Busy Beavers.  Actually Busy Beavers will annoy the heck out of you with its repetition while the Mother Goose Club isn’t so bad.

Grumpy Nation:  What are your recommendations and opposite-of-recommendations for two year old tv watching?

Ask the grumpies: Kids and screen time

Bogart asks:

What is the actual evidence on kids and screen time? Preferably broken down by age and screen-time type. Most of what I can find that seems of any quality is about childhood obesity and/or physical activity, neither of which is high on my list of concerns about my own kid.

The American Academy of Pediatrics recently changed their recommendation.  (According to my uncle the doctor because I’m too lazy to look it up.)  They used to say NO screen time at all for kids under 2 yrs, but that was when screen time was passive, like watching a video.  Now that touchscreens, iPads, etc., have made screens much more interactive even for babies, they have said that they just don’t know how much screen time is good for little kids.  They don’t even know.

#2 (the one with the kids) doesn’t know and doesn’t particularly care (this, she suspects, is what happens if you have a second kid– it changes from, “what does the research say” to “the hell with it, mommy needs a break”).  (She does vaguely think the APA is still recommending little screen-time for babies, but they don’t even know anything about introducing food, so how would they know anything about screen time?)  She does point out the interesting work by Jesse Shapiro that finds no negative effects of tv exposure, and perhaps some positive effects for some groups.  She’s willing to go with that because Jesse Shapiro and his coauthor (who she believes just won the Clark medal) on that paper are good economists.   (A related paper on obesity points out that tv seems to be replacing sleep and other passive activities rather than more active activities in time-use studies.  They blame the rise in obesity on food intake, not energy output.)

She also notes that many for many kids, the tv stops being entertaining after a certain amount of time.  It is quite possible that these kids have an internal turn-off switch and can self-regulate.  A good reason to limit screen time if you can — so that you can save it for when you really need it.

Any members of our readership have a better answer?

Ask the grumpies: Classroom gender resources

Grad Adviser asks:

I’m hoping that you have some ideas for resources that might help the graduate students in my department.  First, a little background.

The female graduate students in my department are in the process of raising the issue of an uncomfortable (I don’t know that they would say hostile) climate – there isn’t one specific incident that strikes anyone as completely outrageous but there is a pattern of behavior that they find dispiriting. Hopefully this will lead to a discussion among the faculty about what to do – including changing what we do in the classroom to foster a better climate and what we can do to help the graduate students be aware of these issues (so that they behave more professionally while students and then be a part of the solution, rather than the problem, once they are faculty members themselves).  But, when we get to that point – assuming we can convince my colleagues that there is a problem – the question is what to do.  The female students say that they are interrupted more, and talked over more, than the male students, and that this leads to them not speaking up as much in seminars.  Then they get criticized by the faculty members for not talking enough. (Some of them also feel uncomfortable during seminars because of inappropriate sexual statements from male graduate students, though I heard about this third-hand so don’t know that it is appropriate for me to bring it up, or to whom, or in what context. It’s a problem, though.) The female graduate students say that they are not encouraged to pursue [important mathy stuff] as much as the male students are, and that if they express any doubt about their abilities (which women are more apt to do), it changes how the faculty see them (in ways that does not seem to occur with the male students). Classroom dynamics seem particularly bad in the [mathy] classes, except for the one that I teach.

Do you have suggestions of books/articles/online resources that address managing the graduate classroom in a gender neutral way? (I’m not even sure that ‘gender neutral’ is the best phrase to use.)  Or that address advising and mentoring as well, now that I think about it?

It might help if we had a more diverse department, as well – one of you mentioned, in one of your posts or in a comment somewhere, that search committees in your department follow some kind of ‘best practices’ that allow you to mitigate problems of implicit bias etc. somewhat – we don’t do anything like that but I would like to suggest it as something we ought to be doing.  Do you have  suggestions of good sources of information about this?

I have tried to look for material on these issues, but most of the classroom-related content I’ve found is about primary or secondary education, and I’ve seen a few outdated (or, pretty old) websites about hiring.  I was hoping that you would have better suggestions.

Some initial thoughts.  We’ve found that things that work in secondary education also tend to work in collegiate education.  20-somethings aren’t that different than teens, even the motivated ones.  And, several of the studies from the 1980s+ are actually still valid today, at least the ones that you’re likely to have come across are still valid.  So don’t completely discount them.

The hiring stuff we do is to a priori decide what the important things we’re looking for in the search are– Research fit, Scholarly publications, Teaching, Diversity, or whatever you want (it doesn’t actually matter so long as it isn’t something that has disparate impact!).  Then each faculty member ranks each resume (or each resume that makes the initial cut) on a Likert (1-5 or whatever) scale for each of these items.  This ranking serves as a check to each faculty member’s implicit biases– you don’t put the numbers together and average them or anything.  It’s just a way for people to see how they’re stacking up the candidates against each other and they can notice when they’re giving someone (usually a guy) with 5 top articles a higher score on research than someone (usually a woman) with 7 top articles.  It’s a little extra paperwork but pretty eye-opening.  (There’s mixed research on whether or not asking people to justify their answers helps or hurts– I would not add that step in here.)  And I should have citations for you, but unfortunately I refereed that paper when home on house arrest and it didn’t end up getting accepted to the AER or wherever I was reviewing it for, even though it was really good.  So I can’t find it.  :(

The other step is that after you’ve made a short list, you simply look at the highest ranked woman and the highest ranked targeted minority groups and compare them to the lowest ranked person on your short list.  Sometimes you’ve accidentally overlooked someone good because of implicit bias.  Sometimes the pool just isn’t very good and the next highest ranked woman or minority is a standard deviation below.  That’s ok, the point is just to make that check.  If it turns out that the woman or minority is equal or better, then you replace someone or add another person to the short list.

Since you are in an NSF-defined STEM field (for readers at home, NSF includes several social sciences in their definition of STEM along with engineering and sciences, but does not include most interdisciplinary departments like B-schools, Med schools, etc.), one good place to start looking for more up-to-date information is from ADVANCE.  ADVANCE is an NSF-funded program to transform the climate for women in academia in the STEM fields. They’ve funded many colleges and universities around the country to study and fix these issues. Check out their list of who they’ve funded and see if there are any schools whose ADVANCE centers you’d feel comfortable asking for information, particularly if there are any that are geographically close to you that could send someone out to do training.  You may even some day want to put forward your own ADVANCE grant, though that would be a university-wide thing, not just for your department.  In addition, they have some resources through their webpage, including this one from VT.  Best hiring practices can be found here and here.  Here’s a pamphlet for your chair.  There’s lots more.

I’m not finding much on teaching, though, possibly graduate students are not ADVANCE’s main focus.  There was recently a study on Harvard business school that made a lot of news…

#2 should have some information on this though… except I don’t.  My suggestions involve things like asking people to read and discuss articles about the effects of subtle biases (e.g., this one), especially this one, and Virginia Valian’s book, Why So Slow? The Advancement of Women.  There are pedagogical techniques for working with classrooms where some students dominate and interrupt other students and so those other students don’t get to contribute; you can find out about these things from places like teaching websites or even maybe google how to run a good meeting as a manager.  Strong role models of female full professors who can prepare students of all genders for the challenges of science and academia are what really helped me, and you may have to be proactive in seeking out speakers and getting students connected with positive mentoring through their professional organizations.

Come to think of it, seek out the professional organization(s) for your area and see what resources they have for students and early-career faculty.  Often sciencey orgs will have some sort of gender program with resources (e.g., Society of Women Engineers).  You should check out whether AAAS has programs — if they don’t, they should.  Their publications sure have put their foot in it enough!  This article has a bunch of links to resources that may help you.

Do our readers have any suggestions on literature about how to run a gender neutral classroom?  How about best practices in hiring?

Ask the grumpies: gifted schools

jlp asks:

We’re on the cusp of being able to send our older child to public school (free! school!) and are debating what to do. We believe that our kids are HG/PG, and we are fortunate, as we have some potential school choice. In our area there are multiple private and magnet public schools (both of which require testing to attend) geared specifically for gifted kids .

As we comb through schools, public and private, I’ve been looking for a variety of characteristics, but the two most important ones seem to be: a) will our child(ren) have like-minded peers of a similar age?* and b) will the school be able to provide sufficient challenge for our child(ren)?

My question is: is there another characteristic that we should prize more highly? If so, what?

Oh, also, because the public schools are magnets, and require testing to attend, this, ostensibly, means we can live anywhere in the city and reap the benefits of a great school. It seems like a no-brainer to go public (assuming DC1 gets in!), since we don’t have to pay for a great school district, nor do we have to pay for private school. However, the student:teacher ratio is 28:1 in K, going up to…I forget, 30:1 or 31:1 in 3rd or 4th. There are no teacher’s aides. Are these class sizes as ridiculously huge as they sound to me?

*Based both on Miraca Gross’ work and also my kid’s passing comments about the kids at his current preschool who “just scribble.”

#1 says:  If you can possibly get your kids in a gifted school, for gods’ sake do it! (One of us is very grumpy about her years in the regular schools.  The other one is still scarred from middle school and doesn’t want to talk about it.)

#2 says:  Golly, these choices are just so hard.  I can’t say what you should do.  What we’ve done has always been to play it by ear every year.  We figure out what our options are, check out the teachers and the school environment, and are willing to change mid-stream if necessary.

One of the reasons we’ve been so keen on acceleration for DC1 is exactly because ze is kind of a jerk about lesser performing kids (generally innocently, first asking questions about why they can’t read, and such, but it seems like something we have to revisit every year).  It does hir a lot of good to not be leaps and bounds in front of everybody else in the same class.  In terms of acceleration, the friends the same age thing is over-rated, at least so far for DC1 (and according to A Nation Deceived, as well as our own childhoods– we always got along better with older kids/adults until we went to boarding school)– DC1 gets along great with kids a couple years older.

The sufficient challenge was also really important to us.  DC1 is *usually* really well-behaved (update:  at the last school function, Easter, all the teachers commented on how much hir behavior had improved.  The Spanish teacher noted that her child had gone through the same phase at that age, which is why she hadn’t commented on it earlier), but when ze isn’t sufficiently challenged ze can be a bit of a pill.  That’s one reason ze does workbooks on weekends.

In our geographic area there are two options that are geared towards “gifted” or “math and science”… one is a public within a school in the low income town next to ours.  We would have to move to attend, but despite being called a gifted magnet, we haven’t really heard anything good about it and suspect it may be a slightly above average little white island in a minority district.  We didn’t investigate further though because we decided the private school would be a better option than selling our house.  It may be great… but, none of the university parents we know are moving to send their kids there.  The other option, also in that town, is a math and science charter.  We know much more about this option because a lot of people in our town have tried it out because there isn’t a residency requirement for it. It has enormous class sizes K-4, larger than state law allows for public schools.  A K teacher quit mid-year because she was so frazzled, according to one parent who pulled her kids out to attend another private school.  I don’t think we know anybody who stayed for elementary.  We hear it’s great for high school and know parents whose kids do high school there.  Of course, the publics here are also supposed to be great for high school.

Continuing… yes, if you believe the TN STAR experiment results, 28:1 in K is too big of a student teacher ratio.  It would be very difficult to do differentiation with a class of that size without an aide or student teacher.  Depending on the teacher and the other students, it might even be difficult to keep order in the class.

Is there something you should prize more highly than classmates and challenge?  That’s hard to say.

We visited the two schools that were willing to talk with us and talked with every parent we knew about our options, and even a public school teacher we knew socially.  We learned a lot from talking and visiting about what was important to us.  One thing that was important was the school and the teachers having an understanding of gifted children and an ability to differentiate.  Another was having a school environment that was pro-gifted kids rather than anti-gifted kids that was willing to work with us.  You can read our saga in our archives.

So, sorry for the [delayed] long non-answer.   When you have a special snowflake for a kid, there’s special snowflake answers, which is to say, really no answer at all.  Talk, visit, and you’ll figure out what is important to you and your kid.  And if things don’t work out, you can always change.

Do any of our readers have better advice for jlp?  How did you decide on a school for your kids, if applicable?  What do you wish your parents had done for you at that age?

Ask the grumpies: How to deal with 9 month salaries?

Kaycookie asks:

My husband is new TT science faculty and I am also working part time teaching in a different department. Okay, very part time because we have 3 little kids. Anyways, any suggestions on dealing with a 9 month salary over 12 months, but then also getting summer support (he is guaranteed this for at least 4 years)? We budget just fine during the year, but not much left to save (about $300/month on top of mandatory retirement at about 13% salary with their match). Is it a bad time to just plan on saving mostly in the summer since we get almost half or our income then?

Hm, here’s another one we should have made an effort to answer earlier.

I’m assuming here that you’re saying that you can save $300/month during the school year but are expecting a deficit during the summer, not that you’re saving $300 on top of saving for the summer during your regular 9 months.

I was in a similar situation for two years (I had 9-months only, DH had summer salary for two years).
1. I sat down and figured out our actual expenses (these include the $1K “emergency” or forgotten fixed expense that we seem to get almost every single month) and our required expenses (mortgage, insurance, etc).
2. From that information, I figured out how much we spend each month and multiplied that by 3 to account for the summer months.
3. Then I subtracted DH’s salary for those three months.
4. Then I added a one month buffer for an emergency fund, just in case the university screwed something up with the summer salary or we had an emergency.  (They never screwed up his, but recently they totally screwed up mine two years in a row after they moved from decentralized grant administration to centralized.)
5. You could then divide that number by 9 to see how much you’d need to save each month not to feel a pinch during the summer. I didn’t do that, but instead looked at the whole number and put away the full amount– as soon as I got that amount I stopped putting money towards summer savings.

However, in my case we were making more than we were spending, which gave us an automatic buffer.  My calculations only told me how much money we could put away in extra retirement or (later) towards the mortgage.  You’re already spending almost exactly what you’re earning.  That doesn’t give you much room.  On top of that, it’s going to make cutting expenses in the summer especially difficult.  Instead of making little cuts throughout the school year, you risk being forced to eat rice and beans or carry a credit card balance (wasting money on interest) come August or September.  That’s not going to be pleasant, especially if you have to do any kind of back to school shopping.

So, what can you do?  One thing you can do is see if the university will prorate your salary to 12 months for free.  When they do that, they pay your 9 month salary as if it was a 12 month salary so you get the same amount each month.  That way you know exactly how much money you’re getting and it’s easier to force yourself to make those little cuts (so you don’t have to make big cuts later).  I think most places will do this if you ask.

You can also increase your earnings.  Even a temporary increase in earnings will allow you to put away extra money for summer.  You don’t have to put away the same amount each month so long as you have the full amount in May (or June or April, depending on when the last set of full paychecks comes).  You probably know better than we do how bringing in more income works in your situation.  Work more part-time hours, for example.  Your DH is probably submitting grants.  Perhaps you could babysit.  Etc.

And, of course, you can try cutting expenses.  A good place to start is to call up all your providers (cellphone, insurance, internet, etc.) and ask for discounts.  It’s amazing what just asking can cut off your monthly bills.  After that you may have to think about bigger cuts– where does your money go?  Setting up Mint.com for a few months may help if you don’t know.  For us when we need to cut, it’s eating out that’s the first big variable expense.  For others it may be clothing or wasting food or vacations etc.  You’ll need to look and see what you’re able to cut and what you’re willing to cut.  If you’re still having trouble you may need to think about larger cuts– housing, transportation, etc.

To make sure you aren’t tempted to touch the summer money before summer, you may want to put it in a separate (possibly online) saving account or put it into laddered CDs that mature and deposit in your checking right when you need them.  Back when interest rates were higher, this was a way to make a little extra money, but now it would just be mainly of use as a commitment device.

Longer-term you’ll have better information about raises, your part-time hours, grants, and so on.  It’s difficult to think about what life will be like without the summer money four years from now if there’s a chance for you to replace it.  Still, you really should think about the worst case scenario– what happens if you lose the summer money but don’t make it up another way?  What will you do to increase income, cut expenses, or save now so you can spend down later?  The less you spend now, the smaller the change to your lifestyle will be if that happens.

Sidenote:  Once the kids are older, you’ll want to up that retirement savings.  13% is fine for now, but you probably have some catch-up savings to do from graduate school.  Think about IRAs once your income goes up.

#2 has never gotten summer salary (boo) but I have my university spread the 9 month salary over 12 months.  I figured it out once, and it cost me literally less than $12 in interest that I could theoretically have earned.  I’m willing to pay $12 in order to get the same amount every month.  Maybe one day I’ll hit the big-time on a grant.  No luck yet.

Gumpeteers, have you been in this situation before?  What do you do with 9 month salaries?  What do you do when you’ve gotten used to summer money?

Follow

Get every new post delivered to your Inbox.

Join 224 other followers