Question

You are currently a senior in college in Miami, FL, and you are considering moving to Los Angeles, CA, for a job opportunity. In your current city, you estimate that you can live off of a $43,000 salary, based on your current budget.

Your current expenses are as follows:

Groceries	$400
Housing	$1,200
Utilities	$100
Transportation	$300
Healthcare	$300

Los Angeles Adjusted Salary: $ 55,301

Groceries:	$382.44
Housing:	$ 2308.44
Utilities:	$ 110.60
Transportation:	$ 313.22
Healthcare:	$ 309.72

1. What percentage is the Los Angeles salary over the Miami one?

2. Will it be enough to cover the percentage increase in expenses?

3. Does it make financial sense to move? Why or Why not?

Answer 1

1. Salary in Miami = $43000

Salary in Los Angeles = $55301

Hence, Los Angeles Salary is greater than Miami Salary by (55301-43000)/43000 *100% = 28.61%

2. Expenses in Miami = 400+1200+100+300+300 =  $2300

Expenses in Los Angeles = 382.44+2308.44+110.60+313.22+309.72 = $3424.42

Increase in Expenses = (3424.42-2300)/2300 *100% = 48.89%

Hence, the increase in salary (28.61%) would not be enough to cover the increase in expenses(48.89%)

3. Increase in Salary amount = 55301 - 43000 = $12301

Increase in Expenses = 3424.42 - 2300 = $1124.42

Financially it makes sense to move to LA, since the dollar amount of salary increase is greater than the dollar amount of expenses increase