Settling into a new home is supposed to be a joyful process.
In August, Jim and Joan Morton bought a house in Camas with enough room to accommodate their seven children: Joseph, 15; Peter, 14; Alex, 12; William, 10; Katie, 8; Patrick, 4; and John Paul, 9 months. A month later, Jim, a 45-year-old mechanical engineer, was laid off from his job at Integra Telecom Inc. in Portland. Suddenly the house with room for the family to grow was boxing them in. The neighborhood covenants require homeowners to stay put for at least a year, so selling the property to lower the family's expenses was not an option.
The couple resolved to replace Jim's former salary and benefits, but just how to achieve that was the question.
Jim currently works on contract at Integra. Joan, 39, is a stay-at-home mom and earns a commission selling jewelry from the Silpada Designs catalog as well as Isotonix vitamins through Market America. She's trying to develop a jewelry line, Jewelry by Joanie, to sell online and in local boutiques.
Though Jim's back at Integra, the contract position offers no benefits or job security. Making mortgage payments is a challenge, especially with rising food and gas prices. They have health insurance through COBRA, but it's costing them an extra $900 a month. The higher premiums have pushed their already tight budget beyond the breaking point, with expenses now outpacing income and leaving no room to chip away at deferred student loans or replace the family's aging Chevrolet Suburban. Jim needs to find a permanent position, but in today's economy competition is fierce and companies increasingly are cutting jobs through layoffs or attrition. Joan would like to develop a home business to increase the family's cash flow and capitalize on her passion for accessories, but she isn't sure how to get started.
The Columbian turned to a range of experts to help the Mortons craft a plan to overcome three obstacles in securing their family's financial future:
Obstacle 1: Getting health insurance when you're between jobs.
After getting laid off at Integra, Jim was able to keep the Regence BlueCross BlueShield of Oregon medical, dental and vision insurance provided by his former employer because of the Consolidated Omnibus Budget Reconciliation Act (COBRA). The Mortons can continue on with Integra's group plan for 18 months from the time Jim's employment ended, but their premiums have jumped from about $100 to $1,000 a month.
Jim wants to know what other options are out there, in case there might be an individual plan that would provide comparable coverage at a lower cost.
• What the experts say:
For those grappling with health insurance decisions, the wealth of information online can be overwhelming. Lara Flynn, a senior associate at Vancouver insurance brokerage firm Bryant & Associates, recommends seeking free advice and consumer education, either from a licensed broker or a volunteer with the Statewide Health Insurance Benefits Advisors (SHIBA) help line.
When going the broker route, Flynn suggests choosing an independent agent who works with all the major insurance providers in our area, including Kaiser Permanente, KPS Health Plans, Regence and LifeWise Health Plan of Washington. Independent agents can offer a more broad complement of plans for clients to compare.
Flynn recommends that consumers read the fine print when looking at plans. Some may look like great deals, but they have lower benefit limits and "give people the illusion that they're fully insured when in truth they have exposure to major medical health expenditures," Flynn said. For example, $150,000 was the maximum benefits paid out in one plan Jim considered. By comparison, his existing Regence plan caps lifetime benefits at $2 million.
In the Mortons' case, sticking with Integra's group Regence plan through COBRA is the best bet for now. An individual plan with Regence offering similar benefits would cost them about $400 more a month. Kaiser has an individual plan they might consider if Jim's COBRA eligibility runs out before he finds another job, but that would mean the hassle of switching doctors and medical facilities. LifeWise wasn't a good match for the Mortons because the rate paid increases per child.
For people in good health who rarely go to the doctor, a plan with high deductibles and low monthly premiums might make sense and help keep costs down, Flynn said. But for those with chronic health problems, or families with small children needing frequent checkups, such plans aren't usually a good fit.
Sometimes it makes sense to put different family members on different plans, depending upon each person's medical needs, Flynn added.
For more information about health insurance in Washington, see the Washington State Office of the Insurance Commissioner's Web site, www.insurance.wa.gov. The state offers a help line where consumers can get assistance comparing various plans, verify that a health insurance provider or broker is licensed and in good standing, or set up a free appointment with a local health benefits expert. That number is 800-562-6900. For more information about COBRA, visit www.dol.gov, select Health Plans & Benefits under Topics, then click on COBRA.
Obstacle 2: Finding a permanent job in your field of interest.
Jim has had two long-term jobs in the past 15 years, both in engineering. Now he's again looking for work, and he feels as though his interview skills are rusty. He also worries that too much jargon dilutes the selling points in his résumé.
• What the experts say:
Many people spend hours online applying for jobs they find on Craigslist, Monster or CareerBuilder, then wonder why they don't get any nibbles. That's because the majority of employers don't want to take a chance on an unknown commodity. They want to hire a candidate they know, or who's been referred to them by someone they trust, said Peter Paskill, division director and senior consultant at CareerMakers in Tualatin, Ore., and co-author of "Want a New Better Fantastic Job? How to Find Satisfying Work in a Topsy-Turvy World."
With that in mind, Paskill recommends that people devote 80 percent of their job-hunting time and effort to networking. Jim would like to be rehired at Integra, though in a different department than where he previously worked. Paskill recommends that Jim go to coffee or have lunch with people from the team he'd like to join and find out what their needs are. That way he can address in his job application his ability to bridge those specific gaps.
In terms of his résumé, Jim scored points with Paskill for owning his experiences by using the pronoun "I," but he didn't do a good enough job clarifying the results he's gotten for previous employers. He undersold himself, a common mistake in a society where it's considered gauche to sing one's own praises, Paskill said. Paskill also suggested that Jim change the language in his résumé, making it accessible to people with business and human resources backgrounds; they, not other engineers, will be the ones reading it.
If Jim is able to land an interview, he needs to come prepared with a one-minute statement about himself and his personal interests, things that make him a well-rounded individual and can't be captured on a résumé, Paskill advised.
Then he needs to be ready with two or three "success stories" that recount demonstrable results he's achieved in past jobs. Paskill recommends the "what I did, how I did it and with what results" approach ("What? How? Wow!" for short).
Finally, Jim needs to let the interviewer know he really wants the job. Employers don't just want someone with skills and experience. They also want passion and enthusiasm, Paskill said.
To read CareerMakers' 10 truths about job transitions, see Careermakers.com and select Ten Truths under the More tab.
Obstacle 3: Starting a Web-based home business
Joan wants to create a jewelry line featuring several designers' products. Her plan is to buy directly from the designers, then sell their wares wholesale to retailers. She also wants to create a Web site to sell directly to consumers, but doesn't think she and Jim have the technical know-how to create a site that matches the jewelry's elegant, sophisticated tone. And with money being tight, they can't afford to hire a Web designer to build the site for them.
• What the experts say:
Unless you can invest major time or start-up capital, the Web may not be the way to go at first. Launching an online business requires building a sophisticated, interactive site and advertising to drive people to it. You also need to stock inventory to fill orders quickly and allow for speedy shipping.
Damien Brown of Vancouver, an entrepreneur and creator of the jewelry line San Damian Collection, says the key for Joan and other entrepreneurs without a lot of time and cash to invest is to start small.
"Keep it simple, and keep your overhead low," he advised.
Joan's first step should be getting a business license from the state, Brown said. This will protect her brand and allow her to write off business expenses on her taxes. Some cities, including Vancouver, require most business owners to acquire a separate license in addition to the one from the state.
Another crucial step for anyone looking to start a small business is formulating a written business plan, said Mike Cooper and Paul Freeman, consultants with the Fort Vancouver chapter of the Service Corps of Retired Executives, or SCORE.
It can take anywhere from a week to six months to create a business plan, and the document will evolve as the business grows and the owner learns what does and does not work.
The plan requires market research, analysis of competitors, a good understanding of the target demographic, profit and loss projections, and other details regarding the business's operations, marketing, finance and management.
Freeman and Cooper also recommend that entrepreneurs get a business bank account and credit card and keep the business' revenue and expenses separate from household finances.
Once Jewelry by Joanie is a bona fide business with a plan in place, Joan should focus on getting local boutiques to carry her line, Brown said. When pitching to buyers, Brown suggests that Joan create simple "look books" with pictures of designs she carries, details on what colors and materials are available, and price lists with wholesale costs and suggested retail figures. She should edit her collection and pitch to suit each buyer's target market.
Joan spent thousands of dollars buying samples from designers to show buyers, and a look book will minimize the overhead she'll need to carry. Brown also suggests Joan not pay the designers for product until she gets paid from stores. She would then pass the revenue on minus her commission (15 percent is standard in the jewelry business, Brown said).
Another inexpensive, effective way for Joan to sell her jewelry is house parties, Brown said. Joan's held these type of events before for Silpada, so she's familiar with how to promote and run in-home jewelry sales.
Mary Ann Albright can be reached at maryann.albright@columbian.com or 360-735-4507.
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