© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Cost of living and Employee Benefits

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Cost of Living Cost of living – includes housing, food, transportation, and other everyday expenses –Rural communities often have a lower cost of living than urban communities. Index form – rates communities on a scale of and gives an average cost community a rating of –A lower index means a lower cost of living. –A higher index means a higher cost of living.

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Congratulations! Sara just graduated from college with a teaching degree and received two job offers. Which is the best deal?

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona A.Job Offer 1 –$35,000 in Reno, NV B.Job Offer 2 –$40,000 in Anchorage, AK Which is the better deal?

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Cost of Living Cost of Living Equation Salary in city 1 x Cost of Living Index of City 2 Cost of Living Index of City 1 = Equivalent Salary in city 2 Round dollar amounts to two decimal places

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sara’s Job Offers Job Offer 1 – Reno, NV –$35,000 salary –105.1 cost of living index Job Offer 2 – Anchorage, AK –$40,000 salary –123.1 cost of living index

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Salary in city 1 x Cost of Living Index of City 2 Cost of Living Index of City 1 = Equivalent Salary in city 2 Cost of Living

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sara’s Cost of Living Equations $35,000 in Reno x = Equivalent Salary in Anchorage $40,000 in Anchorage x = Equivalent Salary in Reno Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sara’s Cost of Living Equations $35, x = $40, = Equivalent salary in Anchorage $40,000 x = $34, = Equivalent salary in Reno Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sara’s Job Outcome Option 1 Job Offer 1 $35,000 in Reno, NV Job Offer 2 $40, in Anchorage A person earning $35, in Reno must earn $40, in Anchorage to have the same spending power. Option 2 Job Offer 1 $40, in Anchorage Job Offer 2 $35,000 in Reno NV A person earning $40,000 in Anchorage must earn $34, in Reno to have the same spending power.

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Conclusion The salary offer in Reno is better by $ ($40, $40,000.00).

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Joe’s Offers Job Offer 1- Denver, CO –$24,000 salary –102.9 cost of living index Job Offer 2 - Seattle, WA –$32,000 salary –148.2 cost of living index

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Cost of Living Equation Salary in city 1 x Cost of Living Index of City 2 Cost of Living Index of City 1 = Equivalent Salary in city 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Joe’s Cost of Living Equations $24,000 in Denver x = Equivalent salary in Seattle $32,000 in Seattle x = Equivalent salary in Denver Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Joe’s Cost of Living Equations $24, x = $34, = Equivalent salary in Seattle $32,000 x = $22, = Equivalent salary in Denver Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Joe’s Job Outcome A person earning $24, in Denver must earn $34, in Seattle to have the same spending power. –Or A person earning $32,000 in Seattle must earn $22,218.62in Denver to have the same spending power. Therefore, the salary offer in Denver is better by $2, ($34, $32,000.00). Job Offer 2 $34, in Seattle, WA Job Offer 1 $24,000 in Denver, CO

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona What about benefits? Benefits- Additional compensations offered beyond wages earned

Comparing Job Offers Base Salary Dollar amount a received before taxes Fringe Benefits Paid sick time Holidays and vacation Health and life insurance Workman’s compensation Retirement contributions Advancement and work incentives Performance raises Bonuses Profit Sharing Employer provided services Gym membership Flexible hours Merchandise discounts Child care Additional perks Relocation allowances Company car Repayment of education loans Stock options Location and environment Commute time Affordable housing Low crime rate Good schools Desired climate

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Benefits Benefits and employer provided services can make a difference: –For example, if a $35, job had 100% of medical insurance coverage valuing $ per month, a person would not have to budget for $4, in medical insurance per year. increase the value of his or her salary to $39, –Benefits and services should be included within the salary before calculating the cost of living.

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sara with benefits Job Offer 1 – Reno, NV –$35,000 salary + $4,800 benefits = $39,800 –105.1 cost of living index Job Offer 2 – Anchorage, AK –$40,000 salary + $5,200 benefits = $45,200 –123.1 cost of living index

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sara With Benefits Salary in city 1 x Cost of Living Index of City 2 Cost of Living Index of City 1 = Equivalent Salary in city 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sara with benefits $39,800 in Reno x = Equivalent salary in Anchorage $45,200 in Anchorage x = Equivalent salary in Reno Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sara with benefits $39, x = $46, = Equivalent salary in Anchorage $45,200 x = $38, = Equivalent salary in Reno Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Sara with benefits With the benefits package included, the job offer in Reno is higher. A person earning $39, in Reno must earn $46, in Anchorage to have the same spending power. Or A person earning $45,200 in Anchorage must earn $38, in Reno to have the same spending power.

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Joe with benefits Job offer 1 - Denver, CO –$24,000 salary + $4,500 benefits =$28,500 –102.9 cost of living index Job offer 2 - Seattle, WA –$32,000 salary +$6,000 benefits = $38,000 –148.2 cost of living index

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Salary in city 1 x Cost of Living Index of City 2 Cost of Living Index of City 1 = Equivalent Salary in city 2 Cost of Living

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Joe with benefits $28,500 in Denver x = Equivalent salary in Seattle$38,000 in Seattle x = Equivalent salary in Denver Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Joe with benefits $28,500 x = $41, = Equivalent salary in Seattle $38,000 x = $26, = Equivalent salary in Denver Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2008 – Career Development Unit – Comparing Job Offers Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Joe with benefits With the benefits package included, the job offer in Denver is higher. A person earning $28, in Denver must earn $41, in Seattle to have the same spending power. Or A person earning $38,000 in Seattle must earn $26, in Denver to have the same spending power.