1. Comparing Job Offers
Financial Literacy

2. What Should Sara Do?
Sara has just graduated from college with a degree in teaching and has been offered a $35,000 job in Reno, Nevada and a $40,000 job in Anchorage, Alaska. Which should she take?
$35,000 in Reno
$40,000 in Anchorage
Not enough information to decide

3. C The correct answer is:
The scenario does not provide information about the cost of living in either city

4. Base Salary
Base salary is the amount a person will receive in his/her annual salary before taxes
Salary is based on:
Location
Education
Laws of supply and demand

5. Fringe Benefits
Additional compensation offered by a company beyond the base wage
May include:
Paid sick time
Holidays and vacations
Bonuses
Health and life insurance
Workman’s compensation
Retirement contributions

6. Opportunity for Advancement and other Work Incentives
Can an employee easily advance within the company and earn more money?
Raises based on performance
Bonuses

7. Employer Provided Services
Additional services provided
May include:
Gym membership
Flexible hours
Merchandise discounts
Child care

8. Additional Perks Relocation allowance Company car
Repayment of education loans
Stock options

9. Location and Environment
Is the job in a good location?
Commute time
Affordable housing
Low crime rate
Good school
Desired climate

10. How Might Wants and Needs Influence a Decision?
A mother may value having child care facilities instead of relocation options
A single person may value having a gym membership instead of merchandise discounts

11. Cost of Living Cost of living includes:
Housing
Food
Transportation
Other everyday expenses
Cost of living may be lower in rural rather than urban communities

12. Cost of Living
Cost of living is reported in index form on a scale with being the average cost of living
A lower number means a lower cost of living
A higher number means a higher cost of living

13. Sarah’s Two Job Offers
$40,000 offer in Anchorage
123.1
105.1
$35,000 in Reno X
= $40,994 (equivalent salary in Anchorage)
This means a person earning $35,000 in Reno must earn $40,950 in Anchorage to have the same spending power. Therefore, the salary offer is Reno is better by $994 ($40,994-$40,000)

14. Joe’s Two Job Offers
$32,000 offer in Seattle
148.2
102.9
$24,000 in Denver X
= $34,565 (equivalent salary in Seattle)
This means a person earning $24,000 in Denver must earn $34,565 in Seattle to have the same spending power. Therefore, the salary offer is Denver is better by $2,565 ($34,565-32,000)

15. Sarah’s Two Job Offers Plus Benefits
$45,200 offer in Anchorage
123.1
105.1
$35, ,800 in benefits in Reno X
= $46,616 (equivalent salary in Anchorage)
(39,800)
This means a person earning $39,800 in Reno must earn $46,616 in Anchorage to have the same spending power. Therefore, the salary offer is Reno is better by $1,416 ($46,616-45,200)

16. Joe’s Two Job Offers Plus Benefits
$38,000 offer in Seattle
148.2
102.9
$24, ,500 in benefits in Denver X
= $41,047 (equivalent salary in Seattle)
(28,500)
This means a person earning $28,500 in Denver must earn $41,047 in Seattle to have the same spending power. Therefore, the salary offer is Denver is better by $3,047 ($41,047-38,000)