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Slides by Pamela L. Hall

Western Washington University

Career Aspects of Personal Finance

Chapter 2

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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

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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.

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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

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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

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Figure 2.1: Relationship Between Educational Level and Income

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000

High school graduate

Some college

Two-year degree

Bachelor's degree

Master's degree

Doctorate degree

Professional degree

Ed

uca

tio

nal

Lev

el

Mean Annual Earnings

Note the positive relationship between educational level and income.

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Figure 2.3: Unemployment and Education

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

1999 1992

Un

emp

loym

ent

Rat

e

High school graduatesCollege graduates

Even in periods of relative economic prosperity the unemployment rate for high school graduates is much higher than the employment rate for college graduates.

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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

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

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000

Psychology

Political Science

Marketing

Accounting

Management Information Systems

Computer Science

Electrical Engineering

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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

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How to Choose a Career

Take a personal inventoryExamine future outlook for jobsMeasure career potentialConsider the benefits of preparation for an

occupational cluster

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Take a Personal Inventory

Define your career goalsExplore 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 jobsExplore your hobbies and personal interests

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Web Links

Game that attempts to match one’s individual interests and skills with similar careers

http://career.missouri.edu/holland

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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

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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

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Figure 2.6: Employment Growth by Major Industry Division

-30% -20% -10% 0% 10% 20% 30% 40%

Mining

Construction

Manufacturing

Transportation, communicationsand utilities

Wholesale trade

Retail trade

Finance, insurance, and real estate

Services

Government

Agriculture

Self employed

Overall employment

Projected Employment Growth (1998-2008)

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

0% 20% 40% 60% 80% 100% 120% 140%

Computer and data processingservices

Allied health services

Residential care

Management and public relations

Personnel supply services

Equipment rental and leasing

Museums and zoos

Research and testing services

Transportation services

Securities and commodity brokers

Projected Employment Growth (1998-2008)

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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

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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

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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

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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-yearHealth care expenses and taxes can be more if

you work for yourself

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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

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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

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Electronic Sources of Career Information

Many employers advertise on the InternetMany career-oriented web sites

Posted job opening as well as the ability to submit resumes

Most are free

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Web Links

Career-oriented web siteswww.careerpath.com www.careers.org www.cweb.comwww.jobweb.orgwww.jobstar.orgwww.americasemployers.comwww.monster.comwww.careers.wsj.comwww.jobhuntersbible.com

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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

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Where to Look

Start with relatives, friends and acquaintancesCampus Career Planning and Placement Office

Set up a placement file—contains interview sheet, transcripts, references

Job service centersPrivate placement agencies (headhunters)Professional associationsNewspapers and trade publicationsDirect solicitation of local employers

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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

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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

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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 experienceUse a straightforward, factual presentation styleTry to limit to one page

Adjust margins, font size, spacing

Print on good-quality paperAppearance is important

Be professional

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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

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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 pageAlways send your resume with a cover letter

Even if submitted electronically

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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

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The Job InterviewFace-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

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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 textUnethical to sign up for an interview for ‘practice’

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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

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Salary and BenefitsShould 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

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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