Personal Finance Chapter 2

How does a job differ from a career?

A career is a commitment to a profession that requires continued training and offers a clear path for occupational growth rather than just an employment opportunity to earn money.

Résumé

A summary of a person's education, training, experience, and other job qualifications.

Interest Inventory

An assessment that helps people identify their interest areas.

What are some economic factors that affect career opportunities?

Interest Rates Inflation Consumer Demand

Aptitudes

Natural abilities that people possess.

Assess financial and legal concerns related to obtaining employment. (LO2-4)

Salary is important but also consider work environment and compensation package. Assess employee benefits based on their market value, future value, taxability, personal needs and goals. Prospective and current employees have legal rights regarding fair hiring and equal opportunities.

Behavioral Interview

Type of interview that focuses on how applicants previously handled real situations.

Career

A commitment to a profession that requires continued training and offers a clear path for occupational growth.

Informational Interview

A company visit or meeting at which one gathers information about a career or an organization.

Cover Letter

A letter that accompanies a résumé and is designed to express interest in a job and obtain an interview.

Health Savings Account (HSA)

A tax-free savings account—funded by employees, employer, or both—to spend on routine medical costs. Usually combined with a high-deductible policy to pay for catastrophic care.

Selection Interview

Interview designed to probe areas of interest to interviewer in order to determine how well a job candidate meets the needs of the organization.

Two methods used to assess the monetary value of employee benefits.

Market Value and Future Value Calculations

Cafeteria-style employee benefits

Programs that allow workers to base their job benefits on a credit system and personal needs.

Corporate Culture

Refers to management styles, work intensity, dress code, and social interactions within an organization.

Cost of living

The average cost of basic necessities, such as housing and food.

Why would you want to use a Market Value Calculation when assessing employment benefits?

To determine the cost of the benefits if you had to pay for them. This method can be used to compare two job offers with different salaries and employee benefits.

How does technology affect available employment positions?

Future business demands will include expanded reading and communication skills. More and more employees are being required to read scientific and technical journals and financial reports and to write speeches and journal articles. Your career success is likely to depend on communication skills, computer skills, and the ability to communicate in more than one language.

Functional Résumé

The organizational format for résumés that highlights an applicant's transferable skills. Appropriate when changing careers or if recent experience does not directly relate to the position for which you are applying.

Vesting

The point at which retirement payments made by the organization on your behalf belong to you even if you no longer work for the organization. It refers only to the employer's pension contributions.

Networking

The process of making and using contacts for obtaining and updating career information.

General Skills

Traits adaptable to most work situations sometimes called social intelligence.

Describe activities associated with career planning and advancement. (LO2-1)

Stages of Career Planning and Advancement 1. Assess and research personal goals, abilities, and career fields. 2. Evaluate the employment market and identify specific employment opportunities. 3. Develop a résumé and cover letter for use in applying for available positions. 4. Interview for available positions. 5. Evaluate financial and other elements of the position you are offered. 6. Plan and implement a program for career development.

Skill Gap

The difference between skills needed by employers and the skills possessed by applicants.

What opportunity costs are associated with career decisions?

- Some people select employment that is challenging and offers strong personal satisfaction rather than employment in which they can make the most money. - Some people refuse a transfer or a promotion that would require moving their families to a new area or reducing leisure time. - Many parents opt for part-time employment or flexible hours to allow more time with their children. - Many people give up secure job situations because they prefer to operate their own business.

SWOT analysis

A planning tool used to analyze an individual's Strengths, Weaknesses, Opportunities, and Threats.

Screening Interview

A preliminary meeting to eliminate unqualified candidates.

Examples of General Skills

Ability to work well with others. Taking initiative to overcome obstacles and challenges. An interest in reading and continued learning. A willingness to cope with conflict and adapt to change. An awareness of accounting, finance, marketing, and other business fundamentals. A knowledge of technology and computer applications. An ability to solve problems creatively in teams. A knowledge of research techniques and resource materials. Effective written and oral communication skills. An understanding of both personal and motivations of others.

Employability Skills

Also called transferable skills, which refer to the basic capabilities necessary for obtaining, maintaining, and advancing in a work situation.

Flexible Employment Benefit Program

Also referred to as cafeteria-style benefits are programs that allow workers to base their job benefits on a credit system and personal needs.

Job

An employment position obtained mainly to earn money, without regard for interests or opportunities for advancement.

Mentor

An experienced employee who serves as a teacher and counselor for a less-experienced person in a career field.

Why is it important to consider taxability when assessing benefits?

An untaxed benefit of lower value may be worth more than a benefit of higher value that is subject to taxation.

Implement employment search strategies. (LO2-3)

Asking questions to obtain information about career planning activities is the basis of successful career planning and development. Obtain employment or related experiences by working part-time or by participating in campus and community activities. Use career information sources to learn about employment fields and identify job opportunities. Prepare a résumé and cover letter that effectively present your qualifications for a specific employment position. Practice interview skills that project enthusiasm and competence.

Tax exempt benefits

Benefits on which you won't have to pay income tax.

Tax deferred benefits

Benefits which delay the payment of income tax to some future time, such as retirement, investments, annuities.

What are some demographic factors that affect career opportunities?

Continuing growth is single and working parents expands the demand for food service and child care. Increased measure time among various population segments has resulted in expanded interest in personal health, physical fitness, technology, and recreational products and services. As people live longer, the demand for travel services, health care, and retirement facilities increases. Expanded demand for employment training services increases opportunities for teachers, corporate trainers, and related careers.

Flexible Spending Account

Employee-controlled pretax earnings set aside to pay for certain eligible expenses, such as health care expenses, during the same year. Money not used is forfeited.

What are some geographic factors that affect career opportunities?

Salary levels may fluctuate by geographic region. A higher salary may actually mean a lower standard of living if the cost of living is high due to the geographical area.

Career opportunities are based on ....

Social Influences Economic Conditions Industry Trends

Technical Skills

Specialized career training refers to technical skills for a specific career. This training includes competencies in fields such as IT, accounting, law, engineering, healthcare, education, real estate, insurance and law enforcement.

Evaluate factors that influence employment opportunities. (LO2-2)

Take actions to keep informed of factors influencing employment opportunities. Consider the selection of a career in relation to: Personal Abilities Interests Goals Experience Training Also consider Social influences affecting employment such as: Demographic Trends Changing Economic Conditions Industrial and Technological trends

Two main categories of work force readiness.

Technical skills and General skills

What skills would be of value in most employment situations?

Technical skills-specialized career training refers to technical skills for a specific profession. This training includes competencies in fields such as information technology, accounting, law, engineering, health care, education, real estate, insurance, and law enforcement. General skills-requires experience in work or organizational settings. For example: an ability to work well with others in a variety of settings, taking initiative to overcome obstacles and meet challenges, and an interest in reading and continuing learning.

Job Creation

The development of an employment position that matches you skills with the needs of an organization.

Analyze techniques available for career growth and advancement. (LO2-5)

When considering your employment situation 3 to 5 years from now, identify informal and formal education and training opportunities that are available to further your professional development and facilitate career changes.