Comparing Job Offers “Take Charge of Your Finances”

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Supply and Demand Supply – the relationship of prices to the quantities of a good or service seller are will to offer for sale at any given point in time. There is a higher supply of school teachers and a lower supply of NFL players

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Supply and Demand Demand – the relationship between prices and the corresponding quantities of a good or service buyer are willing to purchase at any give point in time. There is a higher demand for NFL players compared to teachers.

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Supply and Demand Because there is a lower supply of NFL players and higher demand then compared to teachers they are paid millions of dollars per season.

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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?

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Which is the better deal? A.Job Offer 1 –$35,000 in Reno, NV B.Job Offer 2 –$40,000 in Anchorage, AK C.Not enough information to decide Which option is best?

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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.

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Comparing Job Offers Base Salary Dollar amount a person will receive in his/her monthly paycheck before taxes. Based upon supply and demand Fringe Benefits Paid sick time Holidays and vacation time Bonuses Health and life insurance Workman’s compensation Retirement contributions Opportunity for advancement and other work incentives Raised based on performance Bonuses 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

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Round to two decimal places

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 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

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 $35, x = $40, = Equivalent salary in Anchorage Sara $35,000 in Reno x = Equivalent Salary in Anchorage

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Job Offer 1 –$35,000 in Reno, NV OR Job Offer 2 –$40, in Anchorage, AK A person earning $35, in Reno must earn $40, in Anchorage to have the same spending power. Therefore, the salary offer in Reno is better by $ ($40, $40,000.00).

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Joe’s 2 job offers Denver, CO –$24,000 salary –102.9 cost of living index Seattle, WA –$32,000 salary –148.2 cost of living index Which is the better deal?

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 $24,000 in Denver x = Equivalent salary in Seattle $24, x = $34, = Equivalent salary in Seattle

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Job Offer 1 –$24,000 in Denver, CO OR Job Offer 2 –$ $34, in Seattle, WA A person earning $24, in Denver must earn $34, in Seattle to have the same spending power. Therefore, the salary offer in Denver is better by $2, ($34, $32,000.00).

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Fringe Benefits and employer provided services can make a difference: –For example, if a $35, job had 100% of medical insurance covered valuing $ per month, a person would not have to budget for $4, in medical insurance per year. This would 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.

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 withbenefits 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

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 $39, x = $46, = Equivalent salary in Anchorage 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 $39,8000 in Reno x = Equivalent salary in Anchorage

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 This means, with the benefits package included, the job in Reno is better. A person earning $39, in Reno must earn $46, in Anchorage to have the same spending power.

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 withbenefits Denver, CO –$24,000 salary + $4,500 benefits =$28,500 –102.9 cost of living index Seattle, WA –$32,000 salary +$6,000 benefits = $38,000 –148.2 cost of living index

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 $28,500 x = $41, = Equivalent salary in Anchorage Joe 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 $28,500 in Denver x = Equivalent salary in Seattle

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 This means, with the benefits package included, the job in Denver is better. A person earning $28, in Denver must earn $41, in Seattle to have the same spending power.

1.1.3.G1 © Family Economics & Financial Education – November 2007 – 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 Additional Web sites Web sites available to help calculate salaries and cost of living in various locations – – – $12.95 fee

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