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Cost of Living calculators - how accurate in your opinoin?

Cost of Living calculators - how accurate in your opinoin?

Old Aug 10th 2011, 1:23 pm
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Default Cost of Living calculators - how accurate in your opinoin?

I am currently working and living in the DFW area of Texas (since Feb this year) and obviously know that with the no state tax (higher property taxes but I am renting so doesn't affect me) and cheap housing etc that the cost of living here is substantially cheaper than some other states and cities.

There is the potential that my company will move me to Denver the first half of next year and looking at a few cost of living comparison sites, the percentage increase on my salary I should negotiate varies enormously from one site to another. One of the sites I used takes into consideration various factors to include not just taxes and property prices but rental costs on a like-for-like basis, also the cost of a basket of grocery items. utility bills, public transport, eating out in low/mid and high end restaurants etc so fairly comprehensive. This sites calculates that the cost of living in Denver is 24% higher overall than living in Fort Worth. The majority of this comes from property either to purchase or to rent.

In your experience, how accurate have you found cost of living calculators/comparisons and has anyone recently made the move from DFW area to Denver, Co area?
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Old Aug 10th 2011, 5:00 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

They can only really give you a ball park guide, because they're far to general.

Cost of rent can be massively different from one part of town to another for instance and you wouldn't get that from these sites unless you've got specifics in mind.

You can get a good idea of take home pay though, from the taxes, average cost of healthcare/car insurance etc.
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Old Aug 13th 2011, 3:44 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

They are far too general, I agree.

You also have to compare your specific situation in the UK, with the specific situation you plan to end up in once in the US.

Let me give you an example.

There is a perception that it's much cheaper to live in the US than back home. This seems to be driven by anecdotal stuff that recirculates - e.g. low income tax, low fuel prices in comparison, low cost of electrical goods, etc etc.

Whilst all of this is true in fact, in reality it's not.

Example 1 - the US gallon is about 10% smaller than the UK gallon. A gallon of US fuel costs about 2 to 2.5 times less than the cost of a UK gallon. US cars (including foreign ones built for the US market) typically do far fewer mpg. When you take in to account lower mpg, size of US gallon, etc - the actual cost of travelling the same mileage is about the same - at least it is for us - we had a Vauxhall Vectra in the UK - 43 mpg - here we have a VW Tiguan - about 24 mpg (both are highway figures) - actual cost per mile travelled - almost identical...

Example 2 - for us we're in the 15% federal tax bracket. Add in AZ state income tax, medicare/SS stuff etc etc etc and our total effective 'tax' bill, after accounting for standard deductions, works out to about 27%. This includes paying extra for medical coverage that means we have cover close to, but not quite as universal as the NHS - we have a VERY enlightened employer when it comes to medical coverage... So the EFFECTIVE tax rate is about the same for us as it was back home...

Example 3 - We're paying about the same per month for our home (£1K incl council tax vs $1550 here), than back in the UK, BUT, back in the UK that money got us a 2 bed bungalow in a nice area, with mid size garden. Here that gets us a 5 bed large home, front & back garden and a pool.

Example 4 - electricity - it's around 15% more per KWh here than back home, and we use a ton more of it - the air conditioner at this time of year here in the desert is on constantly it seems, so we are currently burning $400 worth a month - just for 2 of us...

Example 5 - mobile phones - there are good deals to be had, but it's more restricted and closed here... certainly no cheaper in the US

Example 6 - white goods - are about the same price, but in my view not built as well, nor as energy efficient... that may not matter

Example 7 - Car - MUCH cheaper here, by at least a third for exactly the same car in the UK - I'm comparing our new VW Tiguan price here in US to UK.

Example 8 - Food - varies widely - meats are cheaper, though surprised to see veg not as cheap as I thought it would be... but overall for what we eat now, compared to what we ate back home - about the same.

Example 9 - drinks out - same

I look at the many US people around me who are on average incomes (we're fortunate to be earning more than the average) - I wonder how they make ends meet.

If you have kids and a mortgage, you do get significant tax help - a colleague of mine who earns considerably more, pays about the same in tax as me because of the house.kids thing - he owns, and we rent...

All of the above applies really only to our situation, here in Chandler, near Phoenix, AZ. Elsewhere it can be VERY different.

Would we be financially better off if we'd have stayed at home? Yes, initially... but there is so much more opportunity and 'gumption'/'get up and go' attitude here compared to what we experienced back home... We see the nearly $10K of our own money we spent setting up here as an investment in the future, not something to saddle our employer with, and we know that once we're fully settled, it will be easier...

Plus, knowing what we know now, we'd have made a few different choices around some of the big ticket items etc - but that's minor.

It's nice also to be in the warm, and dry, here in the desert!!

Good luck,

Cheers

HTS
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Old Aug 13th 2011, 4:05 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

Originally Posted by HarryTheSpider View Post
Example 3 - We're paying about the same per month for our home (£1K incl council tax vs $1550 here), than back in the UK, BUT, back in the UK that money got us a 2 bed bungalow in a nice area, with mid size garden. Here that gets us a 5 bed large home, front & back garden and a pool.
Your shitting me? That's it...we're moving.

That wouldn't get us a shit hole, of a shit hole apartment, in a shit hole...and we've been looking Be lucking if that covered a 1000sq/ft 2 bed multi home apartment with 2 baths and rubbish collection and winter snow ploughing
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Old Aug 13th 2011, 4:45 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

Originally Posted by HarryTheSpider View Post
They are far too general, I agree.

You also have to compare your specific situation in the UK, with the specific situation you plan to end up in once in the US.

Let me give you an example.

There is a perception that it's much cheaper to live in the US than back home. This seems to be driven by anecdotal stuff that recirculates - e.g. low income tax, low fuel prices in comparison, low cost of electrical goods, etc etc.

Whilst all of this is true in fact, in reality it's not.

Example 1 - the US gallon is about 10% smaller than the UK gallon. A gallon of US fuel costs about 2 to 2.5 times less than the cost of a UK gallon. US cars (including foreign ones built for the US market) typically do far fewer mpg. When you take in to account lower mpg, size of US gallon, etc - the actual cost of travelling the same mileage is about the same - at least it is for us - we had a Vauxhall Vectra in the UK - 43 mpg - here we have a VW Tiguan - about 24 mpg (both are highway figures) - actual cost per mile travelled - almost identical...

Example 2 - for us we're in the 15% federal tax bracket. Add in AZ state income tax, medicare/SS stuff etc etc etc and our total effective 'tax' bill, after accounting for standard deductions, works out to about 27%. This includes paying extra for medical coverage that means we have cover close to, but not quite as universal as the NHS - we have a VERY enlightened employer when it comes to medical coverage... So the EFFECTIVE tax rate is about the same for us as it was back home...

Example 3 - We're paying about the same per month for our home (£1K incl council tax vs $1550 here), than back in the UK, BUT, back in the UK that money got us a 2 bed bungalow in a nice area, with mid size garden. Here that gets us a 5 bed large home, front & back garden and a pool.

Example 4 - electricity - it's around 15% more per KWh here than back home, and we use a ton more of it - the air conditioner at this time of year here in the desert is on constantly it seems, so we are currently burning $400 worth a month - just for 2 of us...

Example 5 - mobile phones - there are good deals to be had, but it's more restricted and closed here... certainly no cheaper in the US

Example 6 - white goods - are about the same price, but in my view not built as well, nor as energy efficient... that may not matter

Example 7 - Car - MUCH cheaper here, by at least a third for exactly the same car in the UK - I'm comparing our new VW Tiguan price here in US to UK.

Example 8 - Food - varies widely - meats are cheaper, though surprised to see veg not as cheap as I thought it would be... but overall for what we eat now, compared to what we ate back home - about the same.

Example 9 - drinks out - same

I look at the many US people around me who are on average incomes (we're fortunate to be earning more than the average) - I wonder how they make ends meet.

If you have kids and a mortgage, you do get significant tax help - a colleague of mine who earns considerably more, pays about the same in tax as me because of the house.kids thing - he owns, and we rent...

All of the above applies really only to our situation, here in Chandler, near Phoenix, AZ. Elsewhere it can be VERY different.

Would we be financially better off if we'd have stayed at home? Yes, initially... but there is so much more opportunity and 'gumption'/'get up and go' attitude here compared to what we experienced back home... We see the nearly $10K of our own money we spent setting up here as an investment in the future, not something to saddle our employer with, and we know that once we're fully settled, it will be easier...

Plus, knowing what we know now, we'd have made a few different choices around some of the big ticket items etc - but that's minor.

It's nice also to be in the warm, and dry, here in the desert!!

Good luck,

Cheers

HTS
But he's not moving from the UK, he's potentially moving from TX to CO.
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Old Aug 13th 2011, 8:37 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

All are taken from one of the few surveys that are done for the cost of living for an area. Usually the surveys are between one and two years behind. One of the best seems to be the one from bankrate.com since each item is listed separately. Although it many not be completely accurate since prices vary from area to area within a city, it should give you a fairly accurate picture of the larger area.

http://www.bankrate.com/calculators/...ec_id=m1025820
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Old Aug 14th 2011, 3:20 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

FWIW, in computing the effective income tax rate, I have seen a habit of simply adding the Federal and State income tax rate to arrive at a purported effective rate. This ignores that fact that state income tax payments are an itemized deduction on the Federal return. On housing, prope.rty tax payments are also deductible.

Don't forget to factor in sales tax.
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Old Aug 14th 2011, 4:14 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

Originally Posted by S Folinsky View Post

Don't forget to factor in sales tax.
And that gets complicated...different states have different things taxed and different rates for certain things.

We don't get food unless it's processed in MA taxed, and neither are clothes...it's weird you can buy a $1000 Hugo Boss suit and not pay a penny in tax on it, but you do on baby nappies
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Old Aug 14th 2011, 5:09 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

Originally Posted by Bob View Post
it's weird you can buy a $1000 Hugo Boss suit and not pay a penny in tax on it, but you do on baby nappies
Great!! I LOVE the good 'ol US of A and its special interest group approach to funding politics!!! I know we're corrupt and morally bankrupt too in the UK when it comes to funding politics etc - I just wish it was a little more open and brazen - then we could have some more sport with it all...

Cheers

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Old Aug 14th 2011, 5:11 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

Originally Posted by Bob View Post
Your shitting me? That's it...we're moving.

That wouldn't get us a shit hole, of a shit hole apartment, in a shit hole...and we've been looking Be lucking if that covered a 1000sq/ft 2 bed multi home apartment with 2 baths and rubbish collection and winter snow ploughing
What makes it even better here Bob, is that they throw in a couple of sand storms and wild fires for FREE!!! Where else would you get that kind of public service?

There's plenty of room here - a whole new sub division just got built next door in the last couple of months...

I'm not sure if you could cope with the humidity though... apparently last week it got in to double digits - that's just hideous

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Old Aug 14th 2011, 5:12 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

Originally Posted by nethead View Post
But he's not moving from the UK, he's potentially moving from TX to CO.
D'Oh! Thanks - I hadn't spotted that!!
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Old Aug 14th 2011, 5:53 pm
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Default Re: Cost of Living calculators - how accurate in your opinoin?

I have lived in both Denver and just outside Fort Worth, and altough Denver was a higher cost of living, I don't recall it being as high as that.
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Old Aug 15th 2011, 1:20 am
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Default Re: Cost of Living calculators - how accurate in your opinoin?

Thanks for the replies everyone. Agree it is difficult to really calculate the differences in overall costs from UK to USA (here in TX) as many different factors but we do seem to have more disposable income currently even though my husband is not yet working over here (was waiting for his EAD).

Just wondered on the difference between Fort Worth and Denver as the % difference quoted on the site I used seemed very high, albeit the vast bulk of the difference seemed to be housing related (whether renting or owning). If that is truly the case then I guess 2 people don't really need a 2,400sf house so we can downsize for the same rental if we moved to Denver. Alternatively I negotiate a COL increase from my company seeing as if we moved if would be because they want me to go there :-) - just good to have a ballpark figure backed up with some evidence to negotiate from!
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