1. Costs of education and training

2. Paying for education and training

3. Training and skills for job success

4. Career choices and income

CHOICES THAT AFFECT INCOME

What significantly affects your potential earning power?

EDUCATION!!

Education pays in higher earnings and lower unemployment rates

Education ChoicesFormal education – classes, programsInformal education – on the job

training, learn as you goAmount and type of education can affect

the amount of money you earnIf pay is high compared to education

required, there is a reasonThink about how for you want to goThink about how it will prepare you

professionally

Costs of Education & Training

Tuition – investment in your education

Room/board, books, supplies, fees are additional

Most likely, your earning potential will be rewarding for the cost of higher educationBachelor’s, Master’s Degrees

A BA/BS can pay up to 1 million $ more over a lifetime over a HS diploma (potential earning power)

Your OptionsCommunity CollegeTrade SchoolCareer and Technical SchoolsApprenticeshipsPublic over Private college educationGraduate programs & post baccalaureate

certs.

Paying for All of This

Loans & Grants Financial Aid – money you receive from

outside source to help you pay for educationLoan: assistance from a bank that must be

repaid with interest (awarded to almost anyone)

Grant: government money that is not repaid (must qualify)23 years old and under – parent must file

w/ student income24 years and older – independent;

student files

Paying for All of This cont’d

Interest: the cost of your loanSubsidized student loan: interest is not

charged until you graduateUnsubsidized student loan: interest is

charged starting the day loan is issuedYou do not have to begin paying either

until after graduationYou may pay as you goFAFSA

Paying for All of This cont’d

Private student loans: issued by a bank or credit unionHigher interest rates because they are not

from the governmentUsually unsubsidizedOption if your income is too high to qualify

for federal financial aidApplication process, show tax returns and

paystubsScholarships!!!!

What seems to be your last option??

WORK AND SAVE!!!!

SO NOW YOU’VE MADE THE RIGHT CHOICES FOR YOU AND ARE READY TO TAKE ON “THE REAL WORLD…”

The Changing Job Market

Job Market – the wide variety of job and career choices that are availableLocal vs. National job marketWhat causes major changes in the job

market?Consider future demand for the job you

are thinking about pursuingWhy do some jobs pay more than

others?Do your research on job trends and

career profiles

Planning Your Career

Job Skills – the specific things you can do, and can do wellHard Skills: Physical human capital,

tangible skillsSoft Skills: Mental human capital,

intangible skillsAptitudes: natural skills, talents, abilitiesInterest inventories: tests that help you

identify what you enjoy doing the mostWhat other “skills” might employers be

looking?

Types of Employment Experience

VolunteerCooperative EducationInternshipsPer diemPart timeFull time

Job Opportunities

What is the FIRST thing YOU should do when started the job search?

Career information sourcesCareer libraries ONET, Occupational

Outlook HandbookMass mediaInternetSchool counselorProfessional OrganizationsNetworking contacts

Job Opportunities cont’d

What sources hand help you find employment opportunities?Job fairsEmployment agenciesVisitNewspapersOnline job search enginesNetworking contacts

You are looking for job descriptions

Good to Know….Update your resume – have it reviewedCreate a cover letterResearch interview questionsResearch the companyDrive to your interview site beforehandPlan a conservative outfitBe 15 minutes early!Leave the cell phone, huge purse and gum

behindImplement good communication skillsFollow-up “thank you” email

Earned IncomeWages – getting paid for every hour workedMinimum wage – lowest pay rate allowed

by law for each hour workedSet by CongressStates can increase

Overtime pay – pay for any hour worked over the set number of regular hoursAt least 1 ½ 40 hour week/holidays

Salary – set pay per month/year

Earned IncomeTips – money given to a person for performing

a serviceSubject to income taxesBased on quality and/or percentage of bill

Commission – a set fee or percentage of a sale paid to a person instead of or in addition to a salaryInconsistent paySubject to income taxesDoes not come without a saleReal estate agents, financial planners,

salesperson, travel agent

Earned Income

Entrepreneur – owner of a businessSelf employmentResponsible for your own income taxesLong hoursIf the business fails, all of your assets are lostWhat is left over after all expenses are paid is

your profitDon’t forget about start-up loans to repayYou typically do not earn a “paycheck”Most of your personal expenses are included

in your business expenses

What Do You Take Home?Gross pay – total amount earned before

deductions are subtractedPay rate x Hours worked = gross payYearly salary = gross pay

Don’t forget about your overtime pay!Net pay – your “take home” pay. The

amount received after all deductions have been made

Deductions – state tax, federal tax, SS tax, Medicare tax, state disability tax, unemployment tax (required) health/life/disability insurance, retirement, your bills, other savings accounts (optional)

Taxes 101Tax deduction: an amount subtracted from Adjusted

Gross Income to lower the amount of tax owed. Home mortgage interest, local property tax payments, contributions to charity, and health or business expenses are the most common.

Tax credit: a direct reduction from the amount of taxes owed (not a deduction from income); tax credits are usually targeted to a policy or objective such as green energy to your home

Taxable income: the amount of income that is taxed after all deductions but before tax credits.

Personal exemption: a dollar amount provided by the federal government (e.g. $3,700 in 2011) that is deducted from income for yourself and each “dependent” such as a child.

Taxes 101

Flat tax: a percentage tax rate that is the same across all levels of income.

Progressive tax: tax rates that increase as income rises.

Marginal tax rate: the rate at which the last (highest) dollar of income is taxed.

Marginal tax bracket: the dollar range in income that corresponds to a marginal tax rate.

Taxes 101Average tax rate: the amount of total

taxes paid/owed divided by total income; this gives a sense of what the average income tax burden for an individual.

Exclusions: dollar amounts of income that are tax-exempt, or not subject to federal income tax. An example would be interest on most U.S. state and municipal bonds.

Tax-deferred income: income to be taxed at a later date, such as interest/earnings from a traditional Individual Retirement Account (IRA).

Sample Pay Stub

Employee BenefitsBenefits: forms of pay other than salary/wagesCafeteria plan: benefit plan that allows workers

to choose form a number of optionsSocial Security: public funds that provide a

degree of financial security to the publicPension plan: retirement plan funded in part by

your employerThree typesFixed income at retirementAnnual contribution by employer that builds up until

you are ready to retire401K – your employer matches up to a certain % of

your contributions

Employee Benefits

Paid holidays: paid for the day, do not work. If you work, you may earn time and a half

Sick leave: covers days the worker is paid if he/she is too ill to go to work

Personal leave: paid time away from work for personal reasons

Maternity leave: paid or unpaid time away from work to take care of a new child

Sabbatical: unpaid leaveNo work no pay scenarios

Other PerksEducational reimbursementHealth/disability/life insuranceHealth flexible spending arrangementsExpense accountTravelCompany car/cellCompany gymBonuses – year-end, holiday, projectsProfit-sharing programs – when company

does well, employees are paid part of that profit

Stock option plans – buying company stock at a reduced price

Unearned IncomeUnearned income: money received from

sources other than working a jobDividend: money earned as a stockholderPension paymentsSS benefitsInterestGambling winningsLotteryPrizesAlimonyAll taxable, but at a lower rate