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Fringe benefit is a term every employer and employee should know. Bankrate explains it.
Fringe benefits are compensation that is in addition to direct wages or salaries. They may include a company car, medical insurance, dental and eye insurance, paid holidays, pension plans, a housing allowance or subsidized meals. Certain fringe benefits are considered part of taxable income.
Offering fringe benefits is a way for employers to attract and retain top talent. Employees often accept or leave a job based on the fringe benefits that they receive.
The Bureau of Labor Statistics reports that in December 2016, the average nationwide cost for employee compensation was $34.90 per hour. Wages and salaries made up 68.4 percent of those costs at $23.87 per hour, and benefits averaged $11.03 per hour and accounted for the remaining 31.6 percent paid by the employer. While these numbers represent the average, there are companies that go above and beyond to provide their employees with benefits. Some of the more dramatic examples include:
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Fifty-seven percent of people consider fringe benefits to be among their top considerations when offered a job. Further, 4 in 5 workers said they would rather have new or better benefits than a pay raise. Employees surveyed named these as their five top benefit picks: