Thursday, July 17, 2008

Five Easy Steps to Gauging Cost of Living Differences Between Big Cities

Author: Nick
Category: Money
Topics: ,

comic 44 - cost of living

There may come a time in your life when you just have to pack yourself up and move to a new place. Sometimes that new place is just down the road from the old one. Other times, you may be looking to relocate to a new city, a new state, or even a new country. Some of you may even desire to relocate to a new planet; I get that feeling at least three times a day.

Moving long distance certainly carries along with it a variety of challenges—finding somewhere new to live (possibly without even looking at the new area first), navigating your way around an entirely different area, making new friends, and much more. But perhaps one of the difficulties many people do not give enough consideration to is cost of living differences between your current city of residence and your new one. For example, you might think you’re getting a 10% raise by taking that new job in New York City, but if you’re coming from Middle of Nowhere, Iowa, you’ll quickly realize that the NYC cost of living is far more than 10% above that of the mid-west. In general, moving from a small town to a big city means you’re going to pay more for just about everything.

But what if you’re moving from one big city to another? All cities are not created equal, and a commodity that is considered cheap in one city may cost a lot more in another. Say you’re a big fan of Florida oranges. If you live in Miami, those things are going to be a lot cheaper there than if you live in San Fransisco. And what about rent and housing costs? These are typically the biggest expense anyone carries, and while sheltering yourself in any big city is going to cost you a good amount, it might cost you a lot more in certain big cities based on factors like how much that city is still growing.

Fortunately computing the cost of living difference between Big City A and Big City B doesn’t require you to compare prices on every item you’ll ever need to buy. In fact, while recently helping a friend compute the cost of living difference between Orlando and Washington D.C., I’ve found that you only need to look at how much five particular things cost in order to get a pretty good approximation of how much more (or less) money it’ll cost you to live in your new city versus the old one:

  1. Apartment rental rates. As we discussed earlier, you’ll be throwing a lot of money at the roof over your head no matter which big city you live in, so knowing how much your monthly rent will run compared to what you’re paying now will tell you right away if that new city is even within your income’s grasp. And if you’re planning to stick around your new city for very long, you may want to check out housing price differences as well.
  2. A loaf of bread at the store. If there’s a single tell-tale grocery item that’ll help you compare cost of living differences, it’s that loaf of rye or wheat or whatever. Even if you’re not a bread eater, the cost of bread seems to be very closely tied to the average cost of other food items and will serve as a good indicator of what your grocery bill will be like in your new city.
  3. The cost of traveling from one end of the city to another. Especially with rising fuel prices, it’s important to know how much it’ll run you to get around in your new town. But just comparing prices at the pump isn’t enough. You’ll also want to take into account any available public transportation options, how bad traffic is, and parking prices. Gas might average 15% higher in your new city, but it might have a more extensive bus or rail system to help you get around for cheaper than driving yourself.
  4. A glass of wine at a restaurant. There are lots of different ways to gauge how much more or less it will cost to have fun in your new city. Even if you’re not a drinker though, a glass of wine at a decent restaurant will serve as a good indicator of how much other entertainment avenues will run you. You could also look at the cost of movie tickets, cover charges at clubs, or a hot dog at a major league baseball game.
  5. A haircut. This is just a good general measure of the cost of living difference between cities. Compare whatever your usual cut or do costs in City A to what it runs in City B and you’ll get a fair idea of how much of a price difference there is in things like clothing, toiletries, and household goods.

One other important thing to keep in mind when comparing cost of living differences. Thanks to the power of internet shopping, you can order a purple lamp shade in a South Dakotan town with a population of 200 at the same price that it would cost to buy it for your $3,000 a month one-bedroom apartment in Los Angeles. Geography is becoming less and less relevant to cost of living measures for many items, so just because you see a pair of shoes in downtown Seattle for three times the price as your shoe store back home in Cabin in the Woods, Montana doesn’t mean everything costs three times more in the bigger city. So be sure to do your pricing homework before committing to any big move.

Oh, and for those who’d like to join me in my extra-terrestrial residential aspirations, I hear that there are some nice three-bedroom condos for under 200,000 Intergalactic Credits just outside Alpha Centauri.

Wednesday, July 9, 2008

Find Out How Your Salary Compares With Excessive Drinking!

Author: Nick
Category: Money

comic 43 - celery requirements

If there is one true driving force behind the world today, it is to make more money than everyone else you know, or at least more than everyone you work with at the same level. After all, what better way is there of measuring self-worth than by the size of your paycheck?

Unfortunately, finding out how much those around you make is easier said than done. Because everyone else is also vying to make more money than you, they won’t readily reveal their annual salaries just because you ask. If it were this simple to find out where you stand on the salary ladder, everybody would know how much everyone makes, and workplace riots would ensue.

But if you absolutely can’t live another minute without knowing how much your fellow financial analysts, data entry specialists, or waste management engineers make, then there is one way that you can pry those figures out of them—a good old-fashioned alcohol interrogation.

I’ve written before about the benefits that drinking can have for your career, but it’s also quite useful for getting sensitive information out of your co-workers as I discovered at a recent week-long work conference. All it took was a group of us, some cheap beer, and a late night in one of my co-worker’s hotel rooms for me to find out that I make a surprisingly large amount more than all of them—even the smart, savvy ones I thought absolutely had to be making more than me. It’s a good thing I was the last one to reveal his salary because I had to make up a number smaller than my actual salary or else there might have been some workplace violence right then and there.

If you’d like to try to reproduce this exercise on your own, here’s a quick instructional guide to help you:

  1. Get a group together you’d like to “interrogate.” Obviously you’re not going to tell them you’re getting everyone together to find out their salaries. Just arrange for a get-together outside of work—at a bar, a bowling alley, your own home, or wherever. Just be sure it’s a friendly, relaxing atmosphere. Also, keep the number attending to a minimum; this will help you take control of the groupthink easier.
  2. Add alcohol. Buy the first round if you’re away from home, or stock a decent bar if you’re hosting at your place. If anyone isn’t drinking, you probably shouldn’t have invited them in the first place, but you’ll need to shed them before you can start the salary discussion. A change of venue at the midpoint of the evening might do the trick.
  3. Stir. Once everyone’s had a few drinks, it’s time to get the conversation heading in the right direction. It should be easy enough to get people talking about work; after all, it’s the one thing you all have in common. Add a little bitching about how underpaid all of you are, and it won’t be long before someone suggests sharing salary figures.
  4. Lie about your salary. Optionally, you may wish not to give out your actual salary figure. Yes, this is the exact opposite of what you’re asking everyone else to do, but if everyone else’s figures are coming in substantially higher or lower than yours, you might want to pitch out a number that’s in the middle of the pack to avoid embarrassment or animosity.

Once you have those salary figures, you’ll want to consider where you fall into the range of your fellow workers. And if you’re making a lot less than everyone else, it might be time to execute another plan I’ll write about later: getting a raise or a promotion through excessive drinking.

Monday, June 16, 2008

Don’t Let High Fuel Prices Stop You From Volunteering

Author: Nick
Category: Money
Topics: , , ,

comic 36 - volunteering

If it seems like every article here is related to gas prices lately, that’s because the price of gas influences so much of what we do with our puny American lives. Want a vacation? Need gas. Want to work? Need gas. Want to drive downtown and pick up a few hookers? Need gas. Well, here’s another one: want to volunteer to help others in your community? Need gas. And unfortunately for a lot of those on the receiving end of volunteer work, high gas prices are pushing some people to reduce their hours spent volunteering or to stop altogether.

While every type of volunteer—from scout leaders to soup kitchen operators—are feeling the pinch at the pump, there are many less fortunate folks out there who need the help of unpaid, unreimbursed volunteers just to get by. And when volunteering includes lots of driving—perhaps taking patients to required medical treatments, or delivering food to shelters—the price of fuel can greatly impact a person’s ability to be generous. Worse yet, with the price of everything going up, more and more people who have never needed a helping hand are finding themselves in positions of need. Put together, that translates to more needy, but fewer volunteers to serve them.

Having driven over 1,000 miles this year alone to perform volunteer work (including 450 miles this past weekend), I have a great appreciation for the hardships volunteers are enduring due to high gas prices. What I don’t have is a lot of sympathy for their excuses if they choose to cut down or quit their volunteering. That’s because Uncle Sam is more than happy to help you pay for your gas that you use in the course of your volunteer work.

In case you don’t already know, mileage incurred that is directly related to volunteering for qualified charitable organizations is tax deductible. For 2008, you are allowed to deduct 14 cents from your taxable income for every mile you drive for charity. So if you drive, say, 2,000 miles a year for charity in a vehicle that gets about 30 miles per gallon, you’ll pay $280 for gas priced at $4.20 a gallon. But if you take the time to carefully log your mileage each time you take a trip for volunteering, you could deduct 14 cents for each of those 2,000 miles, or $280. Isn’t that nice how that math worked out!

While I’ve tried to convince others I volunteer with to log their mileage for the tax deduction, many of them choose not to—even if they itemize their deductions anyway—because it’s “too much trouble.” On the contrary, logging volunteer mileage is incredibly simple:

  1. Create a mileage log book. Take a small notebook, and throw it in your glove compartment along with a pen.
  2. Log your miles for each trip. Record your starting and ending mileage for each trip you make to volunteer for qualified charities.
  3. Add ’em up. Whip out the old calculator (or use a spreadsheet like me) at tax time and take a deduction for your charitable miles driven.

Of course, you’ll want to be careful whenever you try to tell the IRS you don’t owe them tax on every dime you make. You may wish to consult a tax accountant or attorney before deducting your charitable driving, and you’ll want to confirm that your volunteer work is being performed for a qualified charitable organization. But as long as you document your volunteer driving well, you should have nothing to worry about.

On a side note, I will mention that the Federal government has not seen fit to increase the deduction rate for charitable work mileage in over a decade. While deductions for business, medical, and moving mileage have all risen steadily (and are all at rates higher than volunteer work), volunteers have been stuck at the same deduction rate since 1998 despite rising gas prices. I think news of waning volunteerism will finally help to spur a rate bump for volunteers soon.

Monday, June 9, 2008

The 9/80 Work Week: Salvation from High Gas Prices Or Screwball Hippie Idea?

Author: Nick
Category: Money

comic 33 - friday off

There have been rumors spreading where I work that we may soon be switching to a 9/80 work schedule. If you don’t know what that is, consider that most professional adults work a 5/40 work week: 40 hours a week over five days a week (usually eight hours a day). With a 9/80 work schedule, one must look at a two-week work calendar. During an “A” week, one works nine-hour days for five days. During the subsequent “B” week, one works nine-hour days for three days, an eight-hour day the fourth day, and zero hours the fifth day. In short, you work more hours the other days to take every other Friday off.

9/80 work weeks are certainly not a new idea; small parts of my business have been doing it for years. But most workplaces hadn’t given the alternate schedule much thought since it ran counter to a decades-old tradition of 40 hours a week, every week. Today, as gas prices continue to soar and people look for ways to cut down on their commutes, the prospect of saving a round-trip every other week is forcing some employers to give 9/80 a second look.

The 9/80 plan has its clear benefits and drawbacks compared to the traditional 5/40 schedule as the table below summarizes.

9/80 Benefits 9/80 Drawbacks
  • One less commuting round-trip every two weeks.
  • Most work days last nine hours.
  • Frequent non-weekend time off for errands, doctor’s appointments, etc.
  • Holidays and vacations may have scheduling issues.
  • Nine-hour work days may help you avoid rush hours.
  • Nine-hour work days may exhaust workers, reduce productivity.
  • May help company reduce overtime expenses if everyone works nine hours most days.
  • Doesn’t help people who normally work nine or more hours a day anyway. (They may have to work 10+ hours a day now.)
  • Helps discourage “long lunches” when people have an extra full day off every other week.
  • May impact child care schedules, cost workers more for longer care.
  • In theory, workers would take fewer sick days simply because they work fewer total days.
  • May not be viable if your business’s customers all work 5/40.

Personally, I don’t have a preference for a 9/80 or 5/40 work schedule. I usually work a 9-9-9-8-5 work week anyway, so a 9/80 schedule would just mean I’d do a 9-9-9-8-0 every other week instead.

A few places are also trying out 4/40 schedules—10-hour days, every Friday off. While I do work 10 hours a day fairly often anyway, if I had to do that every day, I would probably be rather grumpy by mid-Wednesday. Then again, I’m usually grumpy by mid-Wednesday anyway.

Tuesday, May 20, 2008

Alcohol at the Office: Exciting Innovation or Inviting Intoxication?

Author: Nick
Category: Money
Topics: ,

comic 27 - drinking at work

As a stockholder of Google Inc. (I own three whole shares), I occasionally get e-mails and letters regarding all sorts of fun Google investor news. Lately a lot of that news has been “our shares are plummeting, you should have sold at $700.” One item in particular I recently read on the Google Investor Relations page caught my eye:

Consumption of alcohol is not banned at our offices, but use good judgment and never drink in a way that leads to impaired performance or inappropriate behavior, endangers the safety of others or violates the law.

My first thought upon reading this was “sweeeeeet.” So were my second through seventeenth thoughts. Eventually, after fighting very hard to resist the temptation to submit my resume immediately, I considered the implications of allowing alcohol consumption at work. First there are the obvious benefits:

  • Alcohol can make co-workers easier to deal with. Oh man, I can think of a dozen people where I work that are fifty times more mellow and easier to work with when they’ve had a drink or five.
  • Alcohol inspires creativity. If you don’t believe me, just keep in mind that the following things were invented by drunk people: electricity, computers, the internet, and reality television. Just make sure you’re not too drunk that you can’t remember your great ideas or at least write them down for later.
  • Alcohol can benefit worker productivity. Allowing personnel to drink at work gives them one less reason to want to go home, so they’ll be more than happy to put in the longer hours today’s work environment demands.
  • Alcohol helps with the Monday Blues. After drinking your weekend away, the last thing you probably want to do is go to work Monday morning. But if you can bring your friends Heineken and Captain Morgan with you, Mondays won’t be quite so bad after all.
  • At least it’s not drugs. Employees who can drink at work will be far less likely to sneak out for a quick “smoke” break, and I ain’t talkin’ ’bout cigarettes. And while some people might argue that alcohol is a drug, I would argue that those people should shut the hell up and have a drink.

Of course, there are also some drawbacks to allowing employees to drink while working.

  • Alcohol can impair judgment. “Should we buy out our competitor for $100 million when it’s only worth $5 million? No! That would be stupid! [Five drinks later.] Yes! That would be awesome!”
  • Alcohol makes people tired and/or slow. While alcohol might keep your workers happier and working longer, they might spend some of those hours re-reading the same paragraph 47 times or sleeping under their desks. Counteract this unfortunate side effect of alcohol by blaring extremely loud heavy metal throughout your office building.
  • Drunk people sometimes fight more. This one sort of speaks for itself, so I’ll also note that a policy allowing alcohol at work is not compatible with policies allowing guns and knives at work. One or the other, people!
  • Alcohol can inspire all sorts of bad behavior. If your workplace already suffers from numerous sexual harassment or ethnic discrimination complaints, letting workers drink might not improve things.
  • Other people might look down on your business if everyone’s drinking all of the time. Then again, Google seems not to mind if its workers get sloshed on the clock and it has at least 70 billion users worldwide.

In the end, the decision on whether or not to allow alcohol in the workplace should be made on a case-by-case basis and only after careful consideration of numerous factors including but not limited to employee diversity, workplace safety, and worker productivity. And if your place of business decides that openly allowing you to bring a six-pack to your cubicle for lunch isn’t a good idea, you can just pre-mix your booze and sneak it past security in a soft drink bottle like everyone else you work with already does.