Using the “No Place Like Home” worksheet, gather the following data on the job and two locations you started with in Activity #1.

**1. Taxes:**Using simplified tax tables, find the following tax rates.

- Social Security Tax is paid by both the employee and the employer. Each pays 7.65% of an individual’s earnings. There are several web sites that will provide this information.

- Find the
__Federal Tax Rate__based on median salary. - State Tax Rates can be found here.

**2. Payments**

To determine your car payment, follow the guidelines on the NPLH worksheet and use the web site:

__Car Loans__To figure car expenses in this unit, set the price of the car based on your salary. Use the set interest rate in the Car Loan calculator, setting the length of loan to 60 months. The calculator will compute the monthly car payment necessary at the current interest rate.

You could also look at different interest rates and payment terms to understand how they effect the total amount paid for the car.

*Extending this activity:*You could use the internet to price cars. All car manufacturers have web sites that let you “build” the car you want to purchase. There are lots of other web sites dedicated to selling cars. In fact, ebay.com is the world’s largest car dealer!You could also look at different interest rates and payment terms to understand how they effect the total amount paid for the car.

**House payments:**

To figure housing expenses, use this website: Home Loan Calculator

Remember to again set the price of the housing at $95,000 for an average home. This figure needs to be factored by the CPI found for housing in the two states the students are comparing. Because the cost of housing can vary greatly around the country, you should take $95,000 times your CPI factor. If a state had a housing CPI factor of 123.4, the equation would be 95,000 times 1.234 which would equal $117,230. What this means, is that a home that cost $95,000 in one location of the United States may cost $117,230 in another.

*Extending this activity:* To expand this, you could use the internet to locate houses or apartments that meet your criteria to compare pricing between their two states.

**3. Other Living Expenses**

You will use the __Consumer Price Index__ (CPI) to calculate your living expenses.

**Definition of Consumer Price Index (CPI):**

*The Consumer Price Index (CPI) is an index of the cost of living commonly used to measure inflation. The Bureau of Labor Statistics publishes an index of consumer prices based on the typical market basket of goods and services consumed by all urban consumers during a base period. Among the Consumer Price Index components are the costs of housing, food, transportation, and electricity.*

The Consumer Price Index (CPI) is an index of the cost of living commonly used to measure inflation. The Bureau of Labor Statistics publishes an index of consumer prices based on the typical market basket of goods and services consumed by all urban consumers during a base period. Among the Consumer Price Index components are the costs of housing, food, transportation, and electricity.

**The Consumer Price Index uses**

**100**as average. If a community has a CPI of 95.8 for Food and Groceries, it can be assumed it is a little cheaper to purchase these goods in this location than the average. To get an idea of what this might mean, think of it this way. If an average family spends $125 dollars on food in one week nationally, in a location where the CPI is 95.8, they would spend on average $119.75. To arrive at this number, take the amount spent ($125) times the factor .958 to equal $119.75.

*The Consumer Price Index uses*

**100**as average. If a community has a CPI of 95.8 for Food and Groceries, it can be assumed it is a little cheaper to purchase these goods in this location than the average. To get an idea of what this might mean, think of it this way. If an average family spends $125 dollars on food in one week nationally, in a location where the CPI is 95.8, they would spend on average $119.75. To arrive at this number, take the amount spent ($125) times the factor .958 to equal $119.75.

**What Did I Learn?**

- Is the cost of living (CPI) similar between the cities you are comparing?
- Is living in a smaller city or state above or below average (100) in all areas? In some areas?