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Friday, May 7, 2010

Comparing Taxes and Costs of Living

Graduation season is upon us once again and that means there will be a lot of recent high school and college graduates searching for jobs. Some graduates may be considering jobs in new cities and states. Before a graduate accepts or rejects one of those job offers, he or she should consider the cost of living in the area where the new job is located. Here are a couple of tools to help new graduates or anyone considering a move, to compare the costs of living in a new state or city to their current residence.

PayScale offers a cost of living calculator that allows users to make direct comparisons between cities. The calculator accounts for the costs of groceries, housing, health care, utilities, and transportation. If you choose to enter your current salary, PayScale's calculator will also tell you how much you would need to earn in another location to maintain your current lifestyle.

Taxes can differ wildly from state to state. This is especially true for gasoline and sales taxes. MSN Money has an interactive map that allows users to compare sales taxes and gasoline taxes by state. Please note, the map also compares cigarette and alcohol taxes so use your best judgement before sharing it with younger students. Bankrate also has an interactive map for comparing tax burdens by state. Bankrate's map accounts for sales taxes, property taxes, and estate taxes.

Applications for Education
In addition to being good resources for recent graduates and job-hunters, these tools could be used as part of an economics lesson plan. Have students use the comparison tools to compare states and then investigate why the cost of living and tax burdens vary from state to state.

Here are some related items that may be of interest to you:
10 Resources for Teaching and Learning Economics
Infographic for Understanding Credit Scores

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