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Career Aspects of Personal Finance

Career Aspects of Personal Finance

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Career Aspects of Personal Finance

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  1. Career Aspects of Personal Finance Chapter 2

  2. Your Career Choice and Personal Goals • Realize that what you study in college may drive your career for the next 40 years • Is it more important for you to do something you enjoy or • Is it more important for you to make money • Maybe you can accomplish both

  3. Money and Financial Security • For most of you, your wages/salaries will provide the bulk of your income until you retire • You job will be the source of your retirement contributions • You job will be the source of other benefits such as health insurance, disability insurance, etc.

  4. Other Issues • Job satisfaction • For many people this is more important than income • Intellectually challenging, pleasant work environment, friendly coworkers • Social contribution • Desire to contribute to society

  5. Variables That Affect Your Income Potential • Education • Those with bachelor’s degrees earn almost twice as much as high school graduates • Gap has widened in recent years • People with higher education levels experience lower unemployment levels • However, college costs have risen at a much greater rate than inflation

  6. Figure 2.1: Relationship Between Educational Level and Income

  7. Figure 2.3: Unemployment and Education

  8. The Importance of Continuing Education • In many occupations you are financially rewarded for advancing your education • Nursing, teaching, engineering, etc. • Other occupations require annual continuing education to retain licenses • CPAs, real estate agents, etc. • Continuing education programs are available at most community colleges and other higher learning institutions • Designed for working adults • Often scheduled at night and on weekends • Many employers offer tuition reimbursement and release time

  9. Figure 2.5: Average Starting Salary (by bachelor's degree)

  10. Occupations Earning Patterns • Should not just considering the starting salary for an occupation • Some occupations pay more at the starting level but others may have higher salary potential

  11. How to Choose a Career • Take a personal inventory • Examine future outlook for jobs • Measure career potential • Consider the benefits of preparation for an occupational cluster

  12. Take a Personal Inventory • Define your career goals • Explore your career interests • List your skills and special talents • Check out your campus Placement Center for information and personality tests • List your educational background and try to apply it to the job market • Analyze your likes/dislikes from previous jobs • Explore your hobbies and personal interests

  13. Web Links • Game that attempts to match one’s individual interests and skills with similar careers • http://career.missouri.edu/holland

  14. Help is Available from Career Counselors • Career counselor will interview, test and counsel clients about careers • Interview and testing process may take several days to complete • Tests measure career-oriented abilities • Verbal • Computational • Mechanical • Social • Sales • Supervisory • Personality dimensions

  15. How to Measure Career Potential • Changing career scene requires that you focus on the following • The industry’s growth prospects—some industries are expected to grow much faster than others • The occupation’s growth prospects—careers with greatest potential are those with economic growth, not worker attrition

  16. Figure 2.6: Employment Growth by Major Industry Division

  17. Figure 2.7: The 10 Industries with the Fastest Projected Employment Growth

  18. How to Measure Career Potential • Job location—a depressed area will offer fewer career opportunities • Certain geographical locations offer better prospects for specific occupations • Employer’s growth prospects—financial soundness of company • Recently many large companies have down-sized • Most experts believe growth in jobs will be created by small- and medium-sized companies

  19. Prepare for an Occupational Cluster • An occupational cluster is a group of related jobs • Example—if you get a degree in finance you could work in banking, investment management, brokerage sales, real estate, or financial analysis • Makes you more marketable in today’s changing job market • The broader your skills the more employable you are

  20. Prepare for an Occupational Cluster • Request assignments in other areas of your organization • Sign up for training opportunities even if it does not relate to your current assignment • If you choose an advanced degree you may be better off broadening your knowledge rather than deepening it

  21. The Self-Employment Option • Self-employed workers make up about 7% of today’s work force • Some experts believe this will rise rapidly in the next decade • Half of all businesses do not survive for two years • Earnings can be erratic from year-to-year • Health care expenses and taxes can be more if you work for yourself

  22. Working at Home: A New Employment Trend • Popular trend especially in the publishing and software industry • Advances in technology have made this easier for both employees and employers • With fewer commuters there is less traffic congestion • California promotes telecommuting for this reason

  23. Sources of Career Information • Use the library • Career Guidance and Placement Center on campus • Can provide detailed information about • Specific industries and firms in your areas • List of where recent graduates are employed • Helps you network • Handles on-campus interviews

  24. Electronic Sources of Career Information • Many employers advertise on the Internet • Many career-oriented web sites • Posted job opening as well as the ability to submit resumes • Most are free

  25. Web Links • Career-oriented web sites • www.careerpath.com • www.careers.org • www.cweb.com • www.jobweb.org • www.jobstar.org • www.americasemployers.com • www.monster.com • www.careers.wsj.com • www.jobhuntersbible.com

  26. The Job Search • Many people procrastinate with their job searches • However, should start early in the fall of the year they expect to graduate • Employers like applicants who are • Well-organized • Prepared • Informed

  27. Where to Look • Start with relatives, friends and acquaintances • Campus Career Planning and Placement Office • Set up a placement file—contains interview sheet, transcripts, references • Job service centers • Private placement agencies (headhunters) • Professional associations • Newspapers and trade publications • Direct solicitation of local employers

  28. The Effectiveness of Job Search Techniques • Many job search techniques are relatively ineffective • About 2/3 of all jobs are found by people using informal methods • Networking • Personal contacts • Direct employer contacts • Most job openings are in the hidden job market • Haven’t yet been advertised or are created for individual job seekers

  29. How to Write an Effective Resume • Resume—personal data sheet listing your employment qualifications • Aimed at convincing potential employers that you are right for the job • Should contain at a minimum • Identification • Job objective • Background

  30. How to Write an Effective Resume • You may have gained valuable skills in the past that can be transferred to another job • Don’t forget about volunteer experience • Use a straightforward, factual presentation style • Try to limit to one page • Adjust margins, font size, spacing • Print on good-quality paper • Appearance is important • Be professional

  31. How to Write an Effective Resume • Resume formats • Chronological—lists work and educational experience in chronological order • Functional—highlights important job skills, etc. • Targeted—focuses on a specific job target and lists your qualifications as they relate

  32. Cover Letters • Cover letter is a letter attempting to sell yourself to a potential employer • Tailor each cover letter to the job for which you are applying • Address it to a specific individual • Limit it to one page • Always send your resume with a cover letter • Even if submitted electronically

  33. Cover Letters • Should contain three elements • Attention-grabber • Selling yourself • Explain what you offer and summarize your background • Call to action • Ask potential employer to call you or say that you will be calling them

  34. The Job Interview • Face-to-face meeting with prospective employer • First impressions are made • Prepare in advance • Learn about employer in terms of size, products, locations, philosophy, etc. • Approach interview with self-confidence • Stress your qualifications • Only talk about weaknesses if interviewer brings them up • Try to minimize their effect • Listen carefully to interviewer and respond as directly as possible

  35. The Job Interview • Ask interviewer questions about company and job position • Interviewer will be influenced by • Your ability to express yourself • Your enthusiasm • Your posture and dress • May have to take an aptitude text • Unethical to sign up for an interview for ‘practice’

  36. Deciding on a Job Offer • If you receive a hiring interview you must decide if job matches your • Career goals • Financial goals • Work environment goals • Many job applicants find themselves having to choose between multiple job offers

  37. Salary and Benefits • Should expect a competitive salary • May be able to tactfully negotiate a higher salary • Don’t look at just the numbers—consider the whole package • Work environment • Advancement opportunities • Potential top salary • Fringe benefits • Health insurance • Group life insurance • Reimbursement for educational expenses • Retirement plan

  38. Re-Entering the Workforce • Employers want evidence that your knowledge and skills are current • Try to keep your skills current by • Taking part-time volunteer jobs • Working on freelance projects • Taking refresher courses