1. Comparing Job Offers 1.1.3
Take Charge of Your Finances
Family Economics and Financial Education

2. Supply and Demand
• The availability of jobs and the rate of pay
is dependent upon the economic concept
of supply and demand.
– Supply – the relationship of prices to the
quantities of a good or service that sellers are
willing to sell at any given point in time.
– Demand – the relationship between prices and
the corresponding quantities of a good or
service individuals are willing to purchase at
any given point in time.
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 2
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

3. 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 2009 – Career Development Unit – Comparing Job Offers – Slide 3
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

4. Which is the better deal?
A. Job Offer 1
– $35,000.00 in Reno, NV
B. Job Offer 2
– $40,000.00 in Anchorage, AK
C. Not enough information to decide
Which option is best?
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 4
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

5. 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
100.0 and gives an average cost community a
rating of 100.0.
–A lower index means a lower cost of living.
–A higher index means a higher cost of living.
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 5
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

6. Comparing Job Offers
• In groups of 3-4 participants brainstorm examples for each of the
following categories:
Base Salary Fringe Benefits Opportunity Additional perks Location and
Dollar amount a •Paid sick time for Relocation allowances Environment
person will •Holidays and Advancement Company car •Commute time
receive in his/her vacation time & Other Work Repayment of •Affordable
monthly paycheck •Bonuses Incentives education loans housing
before taxes. •Health and life •Raised based Stock options •Low crime rate
Based upon insurance on performance Gym membership •Good schools
supply and •Workman’s •Guaranteed Flexible hours •Desired
demand compensation pay raise based Merchandise discounts climate
•Retirement on longevity Child care
contributions Telecommuting
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 6
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

7. Cost of Living Equation
Cost of Living Index of City 2
Salary in city 1 x = Equivalent Salary in city 2
Cost of Living Index of City 1
• Round dollar amounts to two decimal places
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 7
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

8. Cost of Living Equation
• In order to compare the cost of living in
two cities always follow these three steps:
– Step 1: Assign each cities numbers. One city
will be assigned the number one and the other
the number two.
– Step 2: Provide the corresponding salaries and
index amounts.
– Step 3: Complete the math and indicate which
city is a better offer and why.
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 8
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

9. Sara’s Job Offers
• Job Offer 1 – Reno, NV
– $35,000.00 salary
– 105.1 cost of living index
• Job Offer 2 – Anchorage, AK
– $40,000.00 salary
– 123.1 cost of living index
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 9
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

10. Sara’s Cost of Living Equations
$35,000.00 in Reno x 123.1
= Equivalent Salary in Anchorage
105.1
Option 1 or Option 2
$40,000.00 in Anchorage x 105.1 = Equivalent Salary in Reno
123.1
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 10
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

11. Sara’s Cost of Living Equations
$35,000.00 x 1.1712654 =
$40,994.29 = Equivalent salary in Anchorage
Option 1 or Option 2
$40,000.00 x .8537774 =
$34,151.35 = Equivalent salary in Reno
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 11
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

12. Sara’s Job Outcome
Job Offer 1 Job Offer 2
$ 35,000.00 in Reno, NV $40,994.29 in Anchorage, AK
• A person earning $35,000.00 in Reno must earn $40,994.29 in
Anchorage to have the same spending power.
– Or
• A person earning $40,000.00 in Anchorage must earn
$34,151.35 in Reno to have the same spending power.
• Therefore, the salary offer in Reno is better by $994.29
($40,994.29 - $40,000.00).
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 12
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

13. Joe’s Offers
• Job Offer 1- Denver, CO
– $24,000.00 salary
– 102.9 cost of living index
• Job Offer 2 - Seattle, WA
– $32,000.00 salary
– 148.2 cost of living index
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 13
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

14. Cost of Living Equation
Cost of Living Index of City 2
Salary in city 1 x = Equivalent Salary in city 2
Cost of Living Index of City 1
•Round dollar amounts to two decimal places
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 14
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

15. Joe’s Cost of Living Equations
148.2 = Equivalent salary in Seattle
$24,000.00 in Denver x
102.9
Option 1 or Option 2
$32,000.00 in Seattle x 102.9 = Equivalent salary in Denver
148.2
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 15
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

16. Joe’s Cost of Living Equations
$24,000.00 x 1.4402332 =
$34,565.60 = Equivalent salary in Seattle
Option 1 or Option 2
$32,000.00 x .6943319 =
$22,218.62 = Equivalent salary in Denver
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 16
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

17. Joe’s Job Outcome
Job Offer 1 Job Offer 2
$24,000.00 in Denver, CO $34,565.60 in Seattle, WA
• A person earning $24,000.00 in Denver must earn $34,565.60 in
Seattle to have the same spending power.
– Or
• A person earning $32,000.00 in Seattle must earn $22,218.62 in
Denver to have the same spending power.
• Therefore, the salary offer in Denver is better by $2,565.60
($34,565.60 - $32,000.00).
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 17
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

18. Benefits
Fringe benefits and employer provided services can
make a difference:
– For example, if a $35,000.00 job had 100% of
medical insurance coverage valuing $400.00 per
month, a person would not have to budget for
$4,800.00 in medical insurance per year. This
would increase the value of his or her salary to
$39,800.00.
– Benefits and services should be included within the
salary before calculating the cost of living.
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 18
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

19. Sara’s Job including benefit
package
Cost of Living Index of City 2
Salary in city 1 x = Equivalent Salary in city 2
Cost of Living Index of City 1
•Round dollar amounts to two decimal places
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 19
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

20. Sara’s Job including
benefit package
• Job Offer 1 – Reno, NV
– $35,000.00 salary + $4,800.00 benefits = $39,800.00
– 105.1 cost of living index
• Job Offer 2 – Anchorage, AK
– $40,000.00 salary + $5,200.00 benefits = $45,200.00
– 123.1 cost of living index
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 20
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

21. Sara’s Job including benefit
package
$39,800.00 in Reno x 123.1 = Equivalent salary in Anchorage
105.1
Option 1 or Option 2
$45,200.00 in Anchorage x 105.1 = Equivalent salary in Reno
123.1
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 21
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

22. Sara’s Job including benefit
package
$39,800.00 x 1.1712654 =
$46,616.36 = Equivalent salary in Anchorage
Option 1 or Option 2
$45,200.00 x .8537774 =
$38,590.74 = Equivalent salary in Reno
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 22
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

23. Sara’s Job Outcome including
benefit package
Job Offer 1 Job Offer 2
$39,800.00 (with benefits) in $45,200.00 (with benefits) in
Reno, NV Anchorage, AK
• A person earning $39,800.00 in Reno must earn $46,566.00 in
Anchorage to have the same spending power.
-Or
• A person earning $45,200.00 in Anchorage must earn
$38,590.74 in Reno to have the same spending power.
• Therefore, with the benefits package included, the job offer in
Reno is higher.
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 23
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

24. Joe’s Job including
benefit package
• Job offer 1 - Denver, CO
– $24,000.00 salary + $4,500.00 benefits =$28,500.00
– 102.9 cost of living index
• Job offer 2 - Seattle, WA
– $32,000.00 salary +$6,000.00 benefits = $38,000.00
– 148.2 cost of living index
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 24
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

25. Cost of Living Equation
Cost of Living Index of City 2
Salary in city 1 x = Equivalent Salary in city 2
Cost of Living Index of City 1
•Round dollar amounts to two decimal places
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 25
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

26. Joe’s Job including
benefit package
$28,500.00 in Denver x 148.2 = Equivalent salary in Seattle
102.9
Option 1 or Option 2
$38,000.00 in Seattle x 102.9 = Equivalent salary in Denver
148.2
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 26
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

27. Joe’s Job including
benefit package
$28,500.00 x 1.4402332 =
$41,046.65 = Equivalent salary in Seattle
Option 1 or Option 2
$38,000.00 x .6943319 =
$26,384.61 = Equivalent salary in Denver
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 27
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

28. Joe’s Job Outcome including
benefit package
Job Offer 1 Job Offer 2
$28,500.00(with benefits) in $38,000.00(with benefits) in
Denver, CO Seattle, WA
• A person earning $28,500.00 in Denver must earn $41,046.65 in
Seattle to have the same spending power.
Or
• A person earning $38,000.00 in Seattle must earn $26,384.61 in
Denver to have the same spending power.
• Therefore, with the benefits package included, the job offer in
Denver is higher.
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 28
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

29. Additional Web sites
• Web sites available to help calculate
salaries and cost of living in various
locations
– www.homefair.com
– www.bankrate.com/brm/movecalc.asp
– www.accra.org
• $12.95 fee
© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 29
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

30. Questions?