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Best of blog posts for week of January 27th

2012-01-27T17:22:00.000-08:00

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week.

DQYDJ talks about Zodiac Signs and Gambler’s Fallacy

ConsumerismCommentary recommends that you Buy Airfare Six Weeks in Advance

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A 3-Step Plan to Reduce Your Food Budget

2012-01-27T07:55:00.000-08:00

This is a guestpost from Mindy Laughton. Mindy is a journalism student attending Saint Louis University. Upon graduation she hopes to travel the world while producing great content for a variety of publications.

When it comes to clothing, travel, or entertainment, my tastes range from being moderately cheap to extremely frugal. I simply don’t like spending money on things that aren’t hugely important to me, and I’ve never ascribed much significance to material items.

Food, however, is a completely different matter altogether. While I many hesitate to whip out my credit card for even the most necessary of other purchases, I probably wouldn’t blink before taking out cash advances or online loans in anticipation of an extremely lavish, overpriced, and thoroughly unnecessary dinner. Simply put, I like good, high-quality food. It is probably not surprising that my tastes run far on the expensive side.
While this taste translates into countless delicious meals, it has also taken a substantial and not-unexpected bite out of my monthly budget. The United States Department of Agriculture estimates that a moderate food budget for someone in my age group should run around $290 per month. Needless to say, I far exceed that number. And I want to change that.

Here is my 3-step plan for reducing my food costs:

1. Limit my restaurant visits. If you spend on food the same way I do, the goal of completely eliminating restaurant meals is one that would almost surely never be realized. Consequently, I am setting a more realistic goal: I can only eat out on one predetermined day per week. Furthermore, I can only spend a certain amount on such meals per month.

2. Start buying cheaper products. At this step, I will change my grocery shopping experience by replacing name brand items with generic store labels. I’ll purchase my non-perishable items less often and in bulk quantities, thereby reducing my per-units costs. I’ll also stop buying more extravagant products (smoked salmon, bottled water, expensive cheese, etc) in favor of products that have a high nutritional value relative to price (beans, rice, lentils, etc).

3. Plan my meals. Once I’ve kicked the bucket on frequent restaurant trips and started to spend less at the store, my final step involves planning out all my meals for several weeks at a time, before I even go shopping. This will insure the continuation of steps 1 and 2. Also, by insuring that I buy only what I know I will need for an upcoming meal, this plan will maximize my grocery efficiencies and eliminate all unneeded purchases.
Hopefully, I can succeed in following this plan faithfully and reducing my food costs. The ultimate goal is to decrease my monthly expenses by at least $50, thereby making my food budget more akin to a low-cost plan in the Department of Agriculture guidelines. Hopefully, with a little commitment and hard work, I will make it to that point.

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Low Cost of Living versus Higher Wages

2012-01-26T07:22:00.000-08:00

One common idea in personal finance is that it is beneficial to live in an area that has a lower cost of living.   Keeping your expenses lower is a basic tenant of financial success.   Living in a lower cost area can have a huge impact on your finances.    The other side of this however is that wages are generally higher in the high cost areas and lower in the lower cost areas.    You could pit this as a choice between lower costs and higher income.   Whats better?

Do you come out ahead living in a low cost city and earning lower wages or living in an expensive city with higher pay?

To examine this issue I decided to do a case study for one profession in a few cities.   I am arbitrarily picking both the profession and select cities to look at for my case study.

I'm going to look at one profession : Computer programmer.    I picked that because its close to my own career field and because I think its a relatively high wage job where pay rates also varies considerably from city to city.    If the wages for an occupation do not vary from city to city then its much more of a given that you'd do better in lower cost cities.   If your wages are relatively low then again it is much easier to come out ahead in a lower cost city.

I'm going to look at 4 cities that are in different cost categories :

Very expensive : San Francisco CA
Pretty expensive : Seattle, WA
Pretty cheap : Minneapolis, MN
Very cheap : Grand Rapids ,MI

Basically I chose these cities because San Francisco and Seattle are likely to have more programmers that get paid larger wage and then I chose Minneapolis and Grand Rapids as semi-random examples of lower cost cities to use as alternatives.    You might end up with entirely different results if you picked four different cities.

Wage, Housing and Cost of Living

First lets look at how wages and cost of living compare for a computer programmer in the four cities.   Since housing is the largest expense, I'm going to pull that figure out as well.   I got average wage amounts for computer programmers for each city from the BLS Metro wage estimates for May 2010. Median home prices are for Q3 of 2011 and I got them from the Realtor.org site from their metro median prices data. (Direct file link).   Lastly I got the cost of living (COL) index figures from the Sperlings Best places cost of living site.

Here is the data :

	Wages	Median home	cost of living
San Francisco	$94,310	$491,000	185
Seattle	$92,840	$286,000	149
Minneapolis	$69,070	$160,000	108
Grand Rapids	$63,420	$111,000	84

Now if you simply look at pay rates proportional to home costs or cost of living index then everything falls in line. Pay versus COL goes up with cheaper cities and the pay versus home cost increases as well. we can express the ratios of Pay versus COL and pay versus housing as follows:

	pay/col	pay/home
San Francisco	$510	19%
Seattle	$623	32%
Minneapolis	$640	43%
Grand Rapids	$755	57%

If we simply stop there then it would be a given that Grand Rapids is the best city because your pay / cost ratios are the best there.   But real life is not so easy.    The ratio between pay and cost of living doesn't really mean all that much.   What really matters is the amount of money you have left over after your expenses.

Lets look at an example of how that works : Consider two hypothetical cities A and B.   Lets say wages are $100k in A and only $50k in B.   Then lets estimate that the cost of living in A is 125% more than city B so that the COL's are A = 225 and B = 100. Wages / COL would be A = $100k/225 = 0.44 and B = 0.5   The wage / cost of living ratio is better in the cheaper and lower cost B city.   However what if your basic expenses are only $35,000 in city B and 125% more for $79k in city A.   At the end of the day when you take your wages minus total expenses you're left with only $15k in city B and $21k in city A.   You come out ahead in the more expensive city even though expenses are 125% more and wages are only 100% more.

With this thinking in mind its more important to look at how much money you're actually left with after accounting for wages minus expenses.

Disposable Income after taxes and housing

I'm going to figure an amount for the disposable income after figuring taxes and housing costs. This is an estimate of what a computer programmer would be left with in each city after paying taxes and a home mortgage.

I used MortgageCalculator.org to estimate the monthly payment for a $100,000 home at about $820 including principal, interest and property tax.   (note that property tax varies widely so this is a simplification on my part)   I then multiplied by 12 for a years worth of mortgage payments. This is the total housing cost in each city based on buying a median price home.   I am assuming 100% financing which isn't too realistic nowadays but it negates the issue of having to deal with varying size of down payments.

I used the tax calculator at Money Chimp to figure the federal income taxes assuming a married couple with 2 kids and only the one income.    I also added 9% of wages to the taxes to account for FICA and state taxes.   I know that 9% is not very accurate and state taxes probably amount to more on average, but I had to arbitrarily pick a figure so I just went with 9%.

	Wages	Tax	Home	Disposal
San Francisco	$94,310	$17,825	$48,314	$28,171
Seattle	$92,840	$17,472	$28,142	$47,226
Minneapolis	$69,070	$11,767	$15,744	$41,559
Grand Rapids	$63,420	$10,411	$10,922	$42,087

Now we start to see something interesting. First lets throw out San Francisco since its obviously too expensive to come out ahead though the wages are highest there. After you pay your taxes and mortgage the programmers living in Seattle are left with more money than those in Minneapolis and Grand Rapids. Of course you still also have to spend money on various other things so that will likely eat up Seattles gains, right? Lets take a look. Here are the more detailed cost of living figures for Seattle, Minneapolis and Grand Rapids:

	Seattle	Minneapolis	Grand Rapid
Overall	149	108	84
Grocery	110	109	98
Health	116	102	95
Housing	243	106	55
Utilities	89	97	92
Transportation	114	110	96
Miscellaneous	122	114	93

If you look at the overall number or the housing umber that is where we see the largest variation. Housing is almost 5 times as expensive in Seattle as it is in Grand Rapids. But once you account for housing the other costs between cities only vary 10-20% more than not. Housing cost alone inflates the overall COL considerably. The cost of living differences with housing excluded are much less from city to city.

I'm going to use the Consumer Expenditure Survey to get national average estimates for how much households spend in the basic categories. For example the CES says that the average spent on transportation is $7,677. Using the national average as a baseline equal to 100 we can then calculate how much an average household is likely to spend on each category given the different cost of living index. For example if the average for transportation is $7,677 nationally and people in Seattle spend 114 index on transportation then we can estimate that Seattle residents spend 114 / 100 * 7677 = $8,752 on transportation and likewise if the index for transportation is only 96 in Grand Rapids then we can estimate that people there spend 96/100 * 7677 = $7,370. I use this logic to estimate the spending for various categories in each city and then sum up the totals.

Here are the total average household spending estimates normalized to the cost of living index for each category for the cities :

	Seattle	Minneapolis	Grand Rapid	national
Grocery	$3,986	$3,950	$3,552	$3,624
Health	$3,662	$3,220	$2,999	$3,157
Utilities	$3,257	$3,550	$3,367	$3,660
Transportation	$8,752	$8,445	$7,370	$7,677
Miscellaneous	$8,932	$8,346	$6,809	$ 7,321
SUM	$28,589	$27,511	$24,096	$25,439

As expected it does cost more to live in Seattle but not by a wide margin. When you set housing aside the spending in the other major categories does not vary as greatly.

Now lets put it all together and see how much you are left with after paying your taxes, paying a mortgage and then spending an average amount on other categories. We can do that by taking the disposable income after taxes and mortgage figured above and then subtracting the sum of other spending in the last table.

	After tax & home	Other spend	Net Saved
Seattle	$47,226	$28,589	$18,637
Minneapolis	$41,559	$27,511	$14,048
Grand Rapids	$42,087	$24,096	$17,990

That 'net saved' amount is the bottom line you would be left after :

Wages - taxes - mortgage payment - sum of other spending = net saved

By this estimation you actually come out ahead in Seattle.    Surprised?

There are several things that should be noted and kept in mind.

This won't happen for any occupation or any city.   As I said early on if your wages are much lower then you'll generally do better in the low cost city. I'd much rather try to live on minimum wage in rural Michigan than in Seattle.    Where the jobs are matters too.   Just because housing is cheap in the Midwest doesn't mean you can find a job there in your field. I'd rather be gainfully employed in high cost San Francisco than be unemployed in Michigan.    I used average wages, median home values and average spending for other categories, but individuals are not average.   Everyone's spending behavior is different and you should figure out how spending and costs would impact you rather than look at what the average American spends.

Remember how I picked a low amount for the FICA and state taxes?    You might now point out how that alone could throw everything off.   Being off 1-2% on the state tax rate would mean Seattle falls behind. I would point out that Washington state is one of the few states with no state income tax.   So, figuring actual tax burden may put Seattle even further ahead.   It is more analysis than I care to do today and thats why I simplified it by picking an arbitrary number.    It is important to keep in mind that if you were to do a real comparison for yourself then you should really figure the actual tax burden for each city in question based on the state and local tax rates.

The points I'm trying to make are :
The answer isn't as simple as finding the lowest cost city or comparing the wage / cost of living ratios.   The more important factor is the amount of money left after expenses are taken out of wages.
You really have to scrutinize individual occupations in specific cities and there aren't any broad rules that tell us if you'll do better financially in a cheaper city or a higher cost area.
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Grade Inflation in High School: Up 0.4 since 1980

2012-01-25T08:17:00.000-08:00

You may have heard about grade inflation.    Grade Inflation is the trend where grades in school trend higher over time.    Today I'll look at some data on that trend.

Grades are Up 0.4 in 30 years.

This old article at the Dept. of Education from the 1980's looks at Sophomores : High School and Beyond a national longitudinal study for the 1980's Two Years in High School : The Status of 1980 Sophomores in 1982 Table 14 on page 18 gives average G.P.A. figures.   For all students the average G.P.A. was 2.6 in 1980.    It was 2.5 for men and 2.7 for women.

Jump forward to 2009 and the overage average G.P.A. in high school was 3.0.    The U.S. Dept. of Educations AMERICA’S High School Graduates results of the 2009 naep high school transcript study
has G.P.A data and reports in figure 8 that average G.P.A is 3.0 for 2009.   They also have overall G.P.A. figures going back to 1990.

Using these two studies as source data here is the G.P.A. trend over the past 30 years :

The trend is pretty clear.   Grades have been going up steadily over the past few decades. In the past few years grade inflation has slowed down and there was not a big difference in average G.P.A from 2005 to 2009.   I am not sure why grades have gone up over time but I can give a couple reasons why they are not going up...

No, its Not that Kids are Just Smarter Nowadays
Its possible that higher grades in high school are simply a reflection of smarter kids. If the curriculum didn't change and the average test scores went up due to smarter kids then this would rightly result in higher grade averages. Unfortunately this isn't the case.   In Are High School Grades Inflated? the ACT looked at grades from 1991 to 2003 and compared G.P.A. to ACT scores. The ACT scores act as a control for the individual students knowledge and aptitude. If kids were just getting smarter then ACT scores would go up and someone who got a 25 on the ACT 20 years ago would get the same GPA then as now.    The ACT study found that G.P.A. went up for students when you hold ACT scores constant.   In other words a student that got a 14 on the ACT in 1991 would have averaged 2.40 G.P.A. but by 2003 the kids with 14 ACT scores were getting 2.65 G.P.A. The kids remained the same smartness (as measured by the ACT) but grade averages went up across the board.    The article High School Grade Inflation from 1991 to 2003 also from the ACT goes into further depth on the topic.

No, School Is Not Easier
You might theorize that G.P.A's are up across the board because the course material in school has gotten easier.   This too is not the case.   Curriculum at high schools has gotten more difficult on average.   The ED report AMERICA’S High School Graduates results of the 2009 naep high school transcript study has data on curriculum as well.   Across the board students are taking more credits and higher level courses.    In Figure 6 we see that in 1990 students took 23.6 credits on average but by 2009 they were completing an average of 27.2 credits.   Students took tougher courses too.   For example Table 8 in the report shows that in 1990 only 57% of students took advanced math but by 2009 there were 84% completing such courses.    Likewise the percent of students taking advanced science went from 61% in 1990 to 86% in 2009.

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2010 Unemployment Figures By Specific Occupation

2012-01-24T07:35:00.000-08:00

A while ago I wrote about Unemployment Figures by Occupation but that data was for broader occupational groups.

The Wall Street Journal has a page with a search function so that you can find the unemployment rate per specific occupation.   The data they used is from the BLS and tracks 500 individual occupations.

The data on the WSJ page is from 2010 so its not very current. Still it could be interesting or even useful for you to know what unemployment looked like in a specific occupation.

I've looked all over the BLS site and for the life of me I can't find where the unemployment rates for specific occupations might be find. It has to be there, but I just can't find it.   There is a LOT of data on the BLS site and its easy to get lost over there.

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Personal Income Distribution data for 2010

2012-01-22T09:27:00.000-08:00

The actual table I used from the Census was Educational Attainment--People 25 Years Old and Over, by Total Money Earnings in 2010, Work Experience in 2010, Age, Race, Hispanic Origin, and Sex
but I just pulled out the total number for the entire population.

I picked the data for people over 25 years old. So there are various folks under the age of 25 who are not included. If you want the information including people 18 to 24 years old then that is also available. I figured that looking at people age 25 years and older would be a little more meaningful. There are a lot of folks 18-24 who are still settling into their occupations or working a transitional job after college, etc.

First here is how the income distribution looks per income $5,000 group :

Now heres a pie chart just showing large $25,000 chunks of income :

As you can see there is also a large % of the population that makes no income. These would be people who do not work for various reasons.

Now lets look at how the income groups are if we exclude the people who have no income :

This is what I think is the real meat: Among the population over age 25 with earnings, about 1/3 of people make under $25,000, another 1/3 make between $25,000 and $50,000 and the other 1/3 make over $50,000.

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Best of blog posts for week of January 20th

2012-01-20T17:28:00.000-08:00

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week.

DQYDJ writes about Another Salary by Major Chart! (For 2011 Graduates) and here is a direct link to the report in question which has info on starting salaries for specific fields.

MainStreet shares 8 Common Credit Myths Debunked

MyMoneyBlog answers the question Do I Have An Obsession With Early Retirement?
and in that article he references an older article he wrote How To Be Happy With Your Work which has a great Venn diagram

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College Grants and Scholarships for Non-Traditional Students

2012-01-20T07:37:00.000-08:00

This is a guest post from Amanda Tradwick. Amanda is a grant researcher and writer for CollegeGrants.org. She has a Bachelor's degrees from the University of Delaware, and has recently finished research on african american grants and texas college grants.

Have you recently decided to go back to school or to get continuing education to increase your earnings potential or to learn the skills needed to start your own business? There are many ways that you can fund your continuing education, including grants and scholarships. These are special awards that do not need to be repaid. If you can qualify for enough of these awards, you can get your education paid for at no cost to you. Most grants and scholarships are awarded according to academic merit, group association, or some other characteristic. For example, some grants and scholarships are available specifically for older students and for those who are returning to school later in life. Here are some of the grants and scholarships available for non-traditional students:

Talbot's Women's Scholarship Program
The scholarship program from this clothing retailer offers one $30,000 scholarship, 17 $10,000 scholarships and 50 $1,000 scholarships to women who are pursuing an undergraduate degree after having been out of school for at least 10 years.

Business and Professional Women's Foundation
The foundation offers Career Advancement Scholarships for women who are 25 or older and who are within two years of completing their bachelor's degrees. This year, the scholarships were limited to women pursuing degrees in Science, Technology, Engineering and Mathematics.

American Legion Non-Traditional Student Scholarship
Members of the American Legion who are starting their education later in life or who are returning to finish their degree after many years are eligible for this scholarship. Awards are granted by region in the amount of $1,000.
Adult Students in Scholastic Transition Program
Executive Women International sponsors this program, which provides assistance for Central Ohio residents who are single parents, are just entering the workforce, or are displaced workers. Scholarships are awarded based on guidelines from the IRS.

Osher Re-Entry Scholarship Program
Individuals who have experienced an interruption in their education of five years or more and want to complete their degree. Individuals must be between 25 and 50 and can be pursuing their education part-time or full-time.

National Collegiate Cancer Foundation
Adults between the ages of 18 and 35 who have cancer or who are cancer survivors are eligible for this scholarship. Awards of $1,000 are granted to those studying for an undergraduate or graduate degree or a certificate.

There are many more grants and scholarships available for non-traditional students, based on regional location and group membership, but this list is a good sampling of what's available. Students at any stage of their studies should start their search for financial assistance by filling out the Free Application for Federal Student Aid (FAFSA) for grants such as the Pell Grant and more.

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FREE - TurboTax basic for Jan. 19-20 only

2012-01-19T17:17:00.000-08:00

You can get TurboTax basic for free right now

This does NOT include state tax filing. Looks like state filing is an extra $39.95 which is not a particularly good deal. If your like most of us and you have to pay state income taxes then you might want to shop around.

If your state does not have state income taxes then you can get free federal filing.

The offer is only good January 19-20th.

I found the deal at Fatwallet

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Getting a 401k Match vs Paying Off Credit Cards

2012-01-18T07:43:00.000-08:00

On FreeMoneyFinance a little while ago a reader shared the story of their finances They were currently working on paying down their credit card debts. Paying off your credit cards is of course a very good idea.   However they were not saving anything for retirement in order to have more money to throw at the debt.

The thought occurred to me that they may be foregoing a 401k employer match in order to pay off credit cards.   That employer match is worth 100% of your money while paying off a credit card only saves you the 15-30% interest the credit card charges. It doesn't make sense to give up getting 100% free money to save 15-30% interest for your dollar.

Better yet if you save money in your 401k then you can take a loan against that 401k money and use the loan to pay off your credit cards.

Yet another bonus of saving money in retirement is the Savers Credit that you may be eligible for.   There is a tax credit for lower income earners such that you can get 10-50% tax credit on your first $2000 of retirement savings.

Lets say you are married with $50,000 net income and you have $25,000 in credit card debts.   You have an extra $1000 at the start of the year from your IRS return.    You could either take that $1000 and pay down your credit card or use to to put towards your 401k savings. Your employer matches your savings 100% up to the first 5%.

Option A : pay down credit card and neglect retirement savings

You take your $1000 after tax dollars and put it towards your credit card debts.   This will save you 20% interest for the year. At the same time you put $0 into your 401k.

Net result = You save $200 in interest. Net benefit $200.

Option B : save in your 401k, get a 100% match, then use 401k loan to pay off credit card

You contribute $1,333 to your 401k. This will cut your tax bill by $333 due to the pre-tax nature of the money.   Your employer matches the $1,333 due to the 100% employer match.   You're in the 25% bracket so if you put $1,333 into a 401k in pre-tax dollars then thats equivalent to $1,000 in post tax money.
You now have $2,666 in the 401k between your $1,333 and the employer match.
The federal government will match your $1,333 due to the savers credit. You get a $133 tax credit.   Take the $133 and pay down your credit card. This leaves you with $867 on the credit card.
Take a $867 loan against the 401k and use that to pay off your credit card.

At the end of the year you'll have $2666 pre-tax balance in your 401k and a $867 loan against the 401k.

Lets say you had to cash out the 401k money to repay the 401k loan.   This would force you to pay 25% taxes and a 10% penalty.   You would need to cash out $1333 form the 401k to pay off that $867.   So we're now left with $1333 in the 401k account and the 401k loan paid off.

If you were desperate and had to cash out the entire 401k then you'd be left with $867 after the 25% taxes and the 10% penalty.   Net benefit $867.

In the end you'd be looking at Option A = $200 or Option B = $867.

A few things to be aware of :

Your 401k loan could have fees associated with it that might make such borrowing a bad idea especially for smaller loan sums.
Some employers only match 25% or 50% of your 401k contributions. In those cases paying down credit cards first might make better sense.
If at all possible you should certainly try to get a lower interest rate on your credit cards. Paying 0% interest on a promotional credit card deal can help a lot.
The Savers Credit has specific rules and a income cap on it so only lower income households qualify.

Rental Vacancy Rates

2012-01-17T07:47:00.000-08:00

If you own any rental property then it is a good idea to keep an eye on the rental market in your area. One of the important indicators for rentals is the vacancy rate. A high vacancy rate can be a problem for landlords since that will generally mean there are more open rental units than prospective renters. If this persists then it can result in lowered rents as landlords compete for tenants. On the other hand a very low rental vacancy rate can be good for owners since it points to more demand than supply.

The U.S. Census Bureau tracks quarterly vacancy and home ownership rates.
They have data going back to 2005 for each quarter.

Here is a table with the data for the 75 largest metro areas during the third quarter of 2011:

Metro Area	% vacant
Akron, OH	8.3
Albany-Schenectady-Troy, NY .	4.5
Alburquerque, NM.	4.3
Allentown-Bethlehem-Easton, PA-NJ	5.8
Atlanta-Sandy Springs-Marietta, GA	9.4
Austin-Round Rock, TX	6.1
Bakersfield, CA	3.7
Baltimore-Towson, MD	12.1
Baton Rouge, LA	7.9
Birmingham-Hoover, AL	8.7
Boston-Cambridge-Quincy, MA-NH	7.1
Bridgeport-Stamford-Norwalk, CT.	7.1
Buffalo-Cheektowaga-Tonawanda, NY	10.9
Charlotte-Gastonia-Concord, NC-SC	14.6
Chicago-Naperville-Joliet, IL	10.2
Cincinnati-Middletown, OH-KY-IN	11.2
Cleveland-Elyria-Mentor, OH/4	11.4
Columbia, SC	6.9
Columbus, OH	8.6
Dallas-Ft. Worth-Arlington, TX	11.9
Dayton, OH.	12.8
Denver-Aurora, CO	8.5
Detroit-Warren-Livonia, MI	14.9
El Paso, TX	3.3
Fresno, CA	7.6
Grand Rapids-Wyoming, MI	5.9
Greensboro-High Point, NC	16.3
Hartford-West Hartford-East Hartford, CT	8.6
Honolulu, HI	6.1
Houston-Baytown-Sugar Land, TX	17.1
Indianapolis, IN.	14.5
Jacksonville, FL	12.1
Kansas City, MO-KS.	15.2
Las Vegas-Paradise, NV	13.2
Los Angeles-Long Beach-Santa Ana, CA	5.0
Louisville, KY-IN	12.6
Memphis, TN-AR-MS.	14.8
Miami-Fort Lauderdale-Miami Beach, FL	13.6
Milwaukee-Waukesha-West Allis, WI	9.8
Minneapolis-St. Paul-Bloomington, MN-WI	8.0
Nashville-Davidson-Murfreesboro, TN	12.2
New Haven-Milford, CT	13.3
New Orleans-Metairie-Kenner, LA	12.3
New York-Northern New Jersey--Long Island, NY	7.2
Oklahoma City, OK.	9.7
Omaha-Council Bluffs, NE-IA	7.9
Orlando, FL	16.6
Oxnard-Thousand Oaks-Ventura, CA	3.0
Philadelphia-Camden-Wilmington, PA .	13.7
Phoenix-Mesa-Scottsdale, AZ	10.4
Pittsburgh, PA.	7.4
Portland-Vancouver-Beaverton, OR-WA	3.1
Poughkeepsie-Newburgh-Middletown, NJ.	17.0
Providence-New Bedford-Fall River RI-MA	8.8
Raleigh-Cary, NC	6.5
Richmond, VA	11.9
Riverside-San Bernardino-Ontario, CA	9.7
Rochester, NY.	8.4
Sacramento-Arden-Arcade-Roseville, CA	7.6
St. Louis, MO-IL	10.5
Salt Lake City, UT	8.5
San Antonio, TX	6.5
San Diego-Carlsbad-San Marcos	8.5
San Francisco-Oakland-Fremont, CA	8.5
San Jose-Sunnyvale-Santa Clara, CA	4.6
Seattle-Tacoma-Bellevue, WA	6.8
Springfield, MA.	2.6
Syracuse, NY	8.7
Tampa-St. Petersburg-Clearwater, FL	13.6
Toledo, OH	14.8
Tucson, AZ	17.0
Tulsa, OK	13.3
Virginia Beach-Norfolk-Newport News, VA	9.7
Washington-Arlington-Alexandria, DC-VA-MD-WV	8.3
Worcester, MA.	2.8

As you can see there is a pretty wide range in the vacancy rates. The median for the cities given is 8.7%. The high in the list is 17.1% in the Houston area and the low is 2.6% in Springfield, Mass.

This is current as of the third quarter of 2011. The vacancy rate for a metro area will go up and down from quarter to quarter.

Lets take a look at a single city over time. Below is the quarterly vacancy rate for Akron, Ohio going back to 2005.

The vacancy rate in Akron swings up and down a few percent points most quarters. It seems like there is something of an annual seasonal cycle with a peak in vacancy rates in the first quarter of the year.
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Sick Leave : Who gets it, how much do we get, how much do we use it and why?

2012-01-16T07:40:00.000-08:00

In the comments over at The Simple Dollar someone wondered how much sick leave people normally get and how much they typically use. I found some data on the topic to answer the question. I figured it is something worth writing more on, so here you go...

Who Gets Sick Leave?

The BLS has good data on sick leave benefits for workers.Its one of the benefit categories they track.

In March 2010 they published the article Paid Sick Leave in the United States

Most people do get paid sick leave. 61% of all private workers get paid sick leave. It varies a lot across occupation, pay rates, employer size etc. Here is how the % of people with sick leave varies across different characteristics.

All workers	61%
occupational group:
Management, professional and related	84%
Service	42%
Sales and office	66%
Natural resources, construction and maintenance	49%
Production, transportation and material moving	52%
full vs part time
full time	73%
part time	26%
Union affiliation
union	69%
nonunion	61%
Wage percentile
Lowest 25% wages	33%
Highest 25%	81%
Employer size
1-99 workers	52%
100-499 workers	67%
500 or more	80%

How Much Sick Leave do People Receive

The same BLS report also tells us how much sick leave people get on average. The private average worker gets 8 days of paid sick leave after 1 year service. The amount of sick leave varies however depending on the job and employer.

All workers	8
full vs part time
full time	8
part time	6
Employer size
1-99 workers	6
500 or more	11

How Much Sick Leave do People actually use?

I found a couple sources to answer the question of how much sick leave people typically use.
The Employee Benefit Research Institute published some data in 2000

"Among those firms that did track it, the average number of sick days used per year by a salaried exempt employee was 3.8 days; salaried nonexempt employees used 5.6 days; nonunion hourly employees used 4.8 days; and union hourly employees used 5.5 days."

Also CCH Incorporated studies absenteeism and their 2007 data found a 2.3% absenteeism rate for that year. If people are absent 2.3% of the time then that is around 6 days in a full time work year.

The numbers vary but it should be safe to say that workers typically use 4-6 days of sick leave per year.

Why do People Use Sick days?

CCH also has data on why people were not at work.

In 2007 the reasons for unscheduled absences were :

Personal illness	34%
Family Issues	22%
Personal needs	18%
Entitlement Mentality	13%
Stress	13%

Personal illness is pretty straight forward. That means the person missed work because they were sick.

Family issues could cover a number of things. I assume a lot of it is childcare related. Parents often have to care for their sick children. An article from the National Partnership for Women and Families says "On average, school-age children miss at least 3 school days per year due to health reasons." So if you have a kid or two then its likely you'll need to miss some work to take care of your child.

Personal needs is pretty vague. I don't know if that means "I need to go to the football game" or if its more along the lines of non illness things like court appearances, religious reasons, or what have you.

I like that they have a category for "entitlement mentality". Thats the people calling in sick for no other reason than because they have unused paid sick days to use.

Its pretty bad that stress causes 13% of the stick days. Whats that say about our work environment in this country?

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What is the Unemployment Rate in Your City?

2012-01-15T07:45:00.000-08:00

Just recently the national unemployment rate dropped down to 8.5%. However the national employment rate is just the nation wide average. Unemployment may be far higher or lower in your city. The unemployment rate is as low as 2.8% in parts of North Dakota and as high as 27% in El Centro California.

The BLS published the unemployment rates for major metropolitian areas as of Nov. 2011. Note that the data is not seasonally adjusted.

Here is a sample of the unemployment rates for various metropolitan areas across the USA.

1	Bismarck, ND	2.8%
8	Logan, UT-ID	3.9
14	Rochester, MN	4.2
23	Morgantown, WV	4.9
34	Ann Arbor, MI	5.2
52	Honolulu, HI	5.7
72	Abilene, TX	6.2
76	Fairbanks, AK	6.3
96	Baton Rouge, LA	6.6
96	Topeka, KS	6.6
130	Lewiston, ID-WA	7
143	Warner Robins, GA	7.2
176	Olympia, WA	7.5
198	Cincinnati-Middletown, OH-KY-IN	7.8
219	Spokane, WA	8.1
236	New Haven, CT	8.3
253	Napa, CA	8.6
266	Winston-Salem, NC	8.9
286	Miami-Fort Lauderdale-Pompano Beach, FL	9.4
307	Decatur, IL	9.9
320	Waterbury, CT	10.2
334	Los Angeles-Long Beach-Santa Ana, CA	10.7
349	Dalton, GA	11.8
366	Stockton, CA	15.5
371	Yuma, AZ	23.7

The full list on the BLS site has a total of 371 metropolitan areas so you can visit the BLS link to see the full list.
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Best of blog posts for week of January 13th

2012-01-13T17:44:00.000-08:00

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week.

FreeMoneyFinance published a nice list of Key Tax Numbers for 2011

FMF also has A Great Example of How to Make Big Money with Credit Cards Where one of his readers reports making over $3800 in a single year on rewards credit card promotions.

MyMoneyBlog looks at Selling Unwanted Gift Cards For Cash: Price Comparison

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