Chris Bigelow

Disparate thoughts and musings…

Archive for Personal Finance

3 Web Sites to Consult When Considering Relocation

moving-vanAccording to one blog, some 35 to 39 million (12%-14%) Americans move to new homes each year. Of those, about 4.7 million people move to different states each year. Relocating to a different state can be an intimidating proposition, for dozens of reasons. Today I’ll review some of the financial implications and some handy tools available on the internet to help you make an informed decision.

From a financial perspective, the two key things to think about are the differences in salary and cost of living between two areas. There are lots of salary data web sites that will provide data on what a particular job pays on average in a particular area. Note that there can be significant highs/lows either side of this average.

Avon-Whitsett ComparoOne great web site I have used to compare cost of living between two areas is Sperling’s BestPlaces. While providing a wealth of other information, this site let’s you compare the cost of living between where you live now and where you are considering moving to. Click on the “Cost of Living” tab and follow the prompts. This tool will tell you how much more (or less) expensive your destination city is, what the major driver is in the cost difference, and a table comparing a number of cost of living indexes between the two locations. Sperling’s also has data on schools, crime, and climate.

Another useful web site is City-Data. This site aggregates demographic, weather, census, and other data in one easy to use interface. Type in a potential relocation spot and you can find out just about anything about it. While City-Data does not have the direct cost of living comparison option that Sperling’s does, they have reams of data and a terrific, user supported forums section where you can ask questions or read previous questions/answers about a particular city or town. I’ve found the forums to be invaluable.

Browns Summit schoolsWhile salary and cost of living are key pieces of information to have when considering relocation, another critical factor for those with children is the quality of education available. If you need more education info than the two previously mentioned sites provide, I recommend that you check out Great Schools. One nice feature of this site is that it will compare the schools in your target city with others in surrounding cities to help you figure out which one(s) is (are) best.

Relocation might be stressful, but these tools will help you objectively evaluate your options and aid you in making the best choice for you and your family.

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The Dream of Higher Education: Has It Become Just That – A Dream?

I’ve been thinking about this for a while.  Perhaps because I have a child starting post secondary education in another year.  Perhaps because I am, as the popular euphemism goes, “in transition.”  College has gotten ridiculously expensive.

Let me back up for a minute.  I attended college at Clarkson University (then known as “Clarkson College of Technology”, or “CCT”).  It was a kinder, gentler time.  And cheaper.  Not that we realized it then.  At the time it seemed like a lot of money to go to college.  My how one’s perspective changes.

Clarkson projected that my freshman year of school would cost something on the order of $5,400.  To a 17 year old that is one mighty large figure.  This number included tuition, room, board, books, and some altogether too meager allowance for laundry and other expenses.  But as numbers go, probably not a bad approximation.  I don’t think their figure included any allowance for travel to and from school.  My freshman year I accomplished that carpooling with an older Clarkson student from my home town in a VW Beetle. And NOT one with a bud vase.   But I digress.

So, back in the day, four years at Clarkson pursuing a “lofty” engineering degree would set you back somewhere between $23,000 and $25,000 (and, no, we did not use slide rules).  I changed majors mid-stream and required one extra semester to line up credits, so my cost was probably another $3,000 higher.  Upon graduation I was fortunate enough to receive two job offers.  Having been dirt poor (trust me – starving artists have nothing on college students) for 4-1/2 years, I accepted the higher offer.

No doubt breaking some social taboo, I will confess that my starting salary out of college was $407 per week.  <tap tap tap>.  That’s $21,164 per year.  So, in rough numbers, a four year (we’ll ignore my extra semester for a moment) engineering degree from a well respected, private institution cost roughly 15% more than my starting salary.  Are you with me so far?

Fast forward to 2009.  I don’t have exact figures but, prior to the nasty recession we are in, starting salaries for graduating engineers were running around $50,000-$55,000 for a manufacturing or mechanical engineer.  Let’s split the difference and call it $52,500 (and before I get inundated with emails let me note that, yes, I realize that there is a difference in starting salaries between, say, a civil engineer and a chemical engineer).

As I mentioned earlier, I have a college bound child.  One more year to go.  Naturally, we are doing the college and major research thing (automotive engineering no less!).   So off I go to various private, engineering school web sites to check their estimated first year total costs.  Ouch! My findings are summarized below:

College cost BMP3

Even if we take the least expensive school (in this example Kettering, and by no means a reflection of it’s reputation), first year expenses have increased 640% ($34,572/$5,400).  Meanwhile, starting salaries have increased roughly 248% ($52,500/$21,164).  What’s wrong with this picture?  A four year engineering degree now costs at least $150,000, or almost three times the first year’s starting salary.  Is it any wonder that students today are graduating with a staggering amount of college loan debt?

And is it any wonder that people are beginning to question the value and payback of a college degree?  Factoid: From 2000 to 2006, there was a 10 percent growth in overall enrollment at two-year institutions, according to the most recent figures from the Department of Education (data from http://www.insidehighered.com/news/2008/08/22/growth).  And I read a fascinating analysis a couple of months ago arguing that there was a strong economic case for becoming a plumber instead of going to college.  Hey – we’ll always need plumbers.  Food for thought…