Where you live has a dramatic impact on your cost of living. As you will see below in the first interactive, a $50,000 earned in New York doesn't go nearly as far as a similar amount in South Dakota. This is an important concept for students to grasp as they consider where they want to settle after high school or college. 

Now on to the interactives you can use with your students...

Interactive #1: This interactive uses Regional Price Parity (RPP) which estimates how much more or less things cost compared to the national average. RPP is commonly referred to as cost of living adjustment. What's cool about this infographic is that it shows income distributions for each state with and without this adjustment.

For example, NewJersey has a relatively high median income, but when you adjust for the cost of living, its rank goes down significantly. Contrast that with South Dakota which ranks in the middle for income but then rises when adjusted for cost of living.

Questions for students:

• Choose two states that you are interested in potentially living in.
  • Which state has a higher income unadjusted for cost of living?
  • Does your answer change when you adjust for cost of living? 
• For the two states that you chose, what was the difference between their income with and without an adjustment for cost of living? 
• How many of the top 10 states based on income NOT adjusted for cost of living appear in the top 10 AFTER adjustment for cost of living? 

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Interactive #2: In this interactive, students start by selecting the state and county they live in. Then they see the table below which provides three measures of income: living wage, poverty wage and minimum wage. Here's an explanation for living wage: 

• The living wage in this interactive is the hourly rate that an individual in a household must earn to support his or herself and their family. That living wage is arrived at by adding up all of the Typical Expenses (table below) and dividing by 2080 which is the number of work hours expected in a year.  Note how these amounts differ based on the size of the household and also the location. Recall that you started by selecting a state and county. As you can see from the Typical Expenses, the living wage estimate accounts for only the basic needs of an individual or a family, excluding expenses such as meals eaten in restaurants, money spent on entertainment, or savings and investment. The living wage is the minimum income standard that, the very basic necessities. 

Questions to go with this interactive:

• Pick one of the household examples: How much difference is there between the minimum wage in your area and the living wage? 
• How do you think individuals and families earning the minimum wage are able to manage their finances when there is a wide gap where the living wage is so much higher than what they are earning? 
• Calculate the percentage of total costs spent on each of the Typical Expense categories? Do any of these costs surprise you? 
• Which expenses seem to be left off this list of Typical Expenses? 

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About the Author

Brian Page

Making a difference in the lives of students through financial capability is Brian’s greatest passion. He comes to NGPF after fifteen years of public school teaching where he was the ‘11 Ohio Department of Education recipient of a Milken National Educator Award, the CEE Forbes Award winner, and a Money Magazine/CNN "Money Hero". He served on the working group for President Obama's Advisory Council on Financial Capability. He has private school experience as a Trustee for the Cincinnati Country Day School and was a past Ohio Jump$tart President. Brian holds a BBA and M.Ed. When Brian isn’t working alongside his NGPF teammates he is likely spending time with his wife, three children, and dog; hiking, or watching Ohio State football.

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