December 31, 2012

Happy New Years!

Happy New Years. 

I'm taking today and tomorrow off from posting.


December 30, 2012

Teacher Pay versus Average wages, Per Capita & Median Incomes by State

Over two years ago I wrote an article discussing average teacher pay versus median household incomes per state.    That post seemed to generate some interest and discussion.   Some of the discussion was criticism based on the apples to oranges comparison between average pay and median household income.

I thought I'd both update the numbers and add some more information. 

I got teacher pay from the Teacher Portal site and they got the numbers from National Education Association (, National Center for Education Statistics (, 2011
The average wage numbers are from the May 2011 state cross industry estimates at the BLS site.

The per capita and median income are off of Wikipedia for 2010 which cites the Census. 

The point of this data is to put teacher pay in relation to general income levels per state.  Teacher pay varies considerably from state to state.   Income levels in general also vary considerably from state to state.   I'm just putting one column of numbers (teacher pay) along side another set of numbers showing state level averages and medians.

Here are the number...

First I'll start with just the average teacher  pay versus average annual wages for all occupations per state:

teacher pay average wages
Alabama $47,803  $39,180
Alaska $62,918  $51,590
Arizona $47,553  $43,670
Arkansas $46,500  $36,340
California $67,871  $51,910
Colorado $49,228  $47,510
Connecticut $69,165  $52,830
Delaware $57,934  $47,420
Florida $45,732  $40,750
Georgia $52,815  $42,590
Hawaii $55,063  $44,600
Idaho $47,416  $38,520
Illinois $64,509  $46,550
Indiana $50,801  $39,700
Iowa $49,844  $38,820
Kansas $46,598  $40,030
Kentucky $48,908  $38,640
Louisiana $49,006  $38,780
Maine $47,182  $40,190
Maryland $63,960  $51,860
Massachusetts $70,752  $54,740
Michigan $63,940  $43,700
Minnesota $53,680  $46,150
Mississippi $41,975  $34,770
Missouri $45,321  $40,500
Montana $47,132  $36,840
Nebraska $47,368  $39,140
Nevada $53,023  $41,860
New Hampshire $52,792  $45,220
New Jersey $66,612  $51,540
New Mexico $46,888  $40,790
New York $72,708  $52,810
North Carolina $46,605  $41,250
North Dakota $44,807  $38,870
Ohio $56,715  $41,590
Oklahoma $44,343  $38,190
Oregon $56,503  $44,290
Pennsylvania $60,760  $44,070
Rhode Island $60,923  $47,390
South Carolina $47,050  $38,560
South Dakota $39,850  $35,390
Tennessee $45,891  $39,130
Texas $48,638  $43,090
Utah $47,033  $40,950
Vermont $50,141  $43,080
Virginia $48,761  $48,870
Washington $52,926  $50,280
West Virginia $44,260  $36,220
Wisconsin $54,195  $41,420
Wyoming $56,100  $42,510

Teachers earn above average wages in every state except Virginia.   Now of course you do have to realize that average pay at the state level includes a lot of people working unskilled jobs with low educational requirements.    This is not an apples to apples comparison, its more of an apples to fruits comparison.   I think a better comparison would be to look at teacher pay versus the average wages for all people with college educations.  However I can't easily find those numbers.    Also note that this doesn't look at the value of benefits for a job and teachers have higher benefit levels than most jobs through their pensions and highly funded healthcare.

Now we'll compare teacher pay versus per capita pay and median income levels:

per capita median household median family
Alabama $47,803 $22,984 $42,081 $52,863
Alaska $62,918 $30,726 $66,521 $77,886
Arizona $47,553 $25,680 $50,448 $59,840
Arkansas $46,500 $21,274 $39,267 $48,491
California $67,871 $29,188 $60,883 $69,322
Colorado $49,228 $30,151 $56,456 $70,046
Connecticut $69,165 $36,775 $67,740 $84,170
Delaware $57,934 $29,007 $57,599 $69,182
Florida $45,732 $26,551 $47,661 $57,204
Georgia $52,815 $25,134 $49,347 $58,790
Hawaii $55,063 $28,882 $66,420 $77,245
Idaho $47,416 $22,518 $46,423 $54,689
Illinois $64,509 $28,782 $55,735 $68,236
Indiana $50,801 $24,058 $47,697 $58,944
Iowa $49,844 $25,335 $48,872 $61,804
Kansas $46,598 $25,907 $49,424 $62,424
Kentucky $48,908 $22,515 $41,576 $52,046
Louisiana $49,006 $23,094 $43,445 $53,702
Maine $47,182 $25,385 $46,933 $58,185
Maryland $63,960 $34,849 $70,647 $85,098
Massachusetts $70,752 $33,966 $64,509 $81,165
Michigan $63,940 $25,135 $48,432 $60,341
Minnesota $53,680 $29,582 $57,243 $71,307
Mississippi $41,975 $19,977 $37,881 $47,031
Missouri $45,321 $24,724 $46,262 $57,661
Montana $47,132 $23,836 $43,872 $55,725
Nebraska $47,368 $25,229 $49,342 $61,888
Nevada $53,023 $27,589 $55,726 $64,418
New Hampshire $52,792 $31,422 $63,277 $76,446
New Jersey $66,612 $34,858 $69,811 $84,904
New Mexico $46,888 $22,966 $43,820 $52,565
New York $72,708 $30,948 $55,603 $67,405
North Carolina $46,605 $24,745 $45,570 $56,153
North Dakota $44,807 $25,803 $46,781 $62,920
Ohio $56,715 $25,113 $47,358 $59,680
Oklahoma $44,343 $23,094 $42,979 $53,607
Oregon $56,503 $26,171 $49,260 $60,402
Pennsylvania $60,760 $27,049 $50,398 $63,364
Rhode Island $60,923 $28,707 $54,902 $70,663
South Carolina $47,050 $23,443 $43,939 $54,223
South Dakota $39,850 $24,110 $46,369 $58,958
Tennessee $45,891 $23,722 $43,314 $53,246
Texas $48,638 $24,870 $49,646 $58,142
Utah $47,033 $23,139 $56,330 $64,013
Vermont $50,141 $27,478 $51,841 $64,135
Virginia $48,761 $32,145 $61,406 $73,514
Washington $52,926 $29,733 $57,244 $69,328
West Virginia $44,260 $21,232 $38,380 $48,896
Wisconsin $54,195 $26,624 $51,598 $64,869
Wyoming $56,100 $27,860 $53,802 $65,964

There are four columns of numbers there for each state.  First is the average pay for teachers.   This is an average figure and includes all teachers of varying experience levels.  It may be skewed one way or another if teachers in a given state have high or low average experience on the job.
Per capita income is the amount of wages averaged over a population so that includes people who don't work.  Median household income includes all households so its a mix of single people, single unmarried parents, retired couples and married couples with multiple children.   Family income only includes families and does not include single people.

None of these are perfect benchmarks for teacher pay versus other occupations nor does this say anything at all about whether or not teacher pay levels are 'fair' or the like.    I'm not saying teachers make too much nor too little.   We're just looking at the variation in pay for teachers from state to state and putting that into comparison with general wages per state.


December 28, 2012

Best of Blogs for Week of December 28th

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

DoughRoller discusses What is the Saver’s Tax Credit?
This is a little discussed income tax credit available to a lot of people to help boost their retirement savings.

MyMoneyBlog tells about how you can Backup Your Music Library For Free Into Google’s Cloud Service

PlanetMoney tells us how Argentine Navy Defeats Hedge Fund  and little while back they explained Why Legos Are So Expensive — And So Popular

FMF asks Should Americans Be Forced to Save for Retirement?

December 27, 2012

FREE - 25 4x6 photos from RiteAid

RiteAid is giving out 25 free 4"x6" photo prints on their website if you use the promo code EPRINT

You can order the prints online and pick them up free in the store.

Its probably a limited time offer but I am not sure when it expires.

I saw this one on Slickdeals

December 25, 2012

December 20, 2012

What Percent of People file 1040, 1040A or 1040EZ?

When you think about filing income taxes you generally think about the 1040 form.   Thats the 'long form'.   There are also two shorter versions the 1040A and the very simplistic 1040EZ.     A large percent of the population doesn't do the 1040 form.   I got the numbers from the IRS 2010 tax stats.

With 142.8 million filers in 2010 the breakdown is as follows:

I was actually surprised that more people don't file 1040EZ.   For a lot of people taxes amount to a W2 for income and their standard deduction and exemption.


December 18, 2012

How Much More Expensive is Organic Food?

Last week Retire By 40 questioned Are Organic Foods Worth The Premium?   While organic foods are still only around 4% of total food sales, a growing number of people buy organic.

But a side topic of that discussion is : what IS the actual premium cost for organic?   Or to put it another way:  how much more expensive is organic food?    I thought I'd answer that question with a example of various organic food prices compared to the typical non-organic options. 

Here's a sample of prices for regular foods versus organic food in several categories:

Reg Organic premium
Apple Juice 0.03 0.07 133%
Wheat bread 0.05 0.15 200%
Cheerios/Cascadian O's 0.26 0.44 69%
Black Bean - can 0.07 0.09 29%
Vegetable soup 0.13 0.22 69%
1% milk gallon 0.03 0.06 100%
Eggs AA dozen 2.09 4.49 115%
Angel hair pasta 0.08 0.39 388%
Chicken breast, lb 0.37 0.56 51%

The prices are the cost per ounce except for eggs which is the cost for a dozen.   I simply grabbed some prices from Safeway. Unfortunately Safeway didn't list the produce so I don't have prices for fruits or vegetables.     This is just a sample of prices and only meant as an example.   Of course these prices will change over time and vary from store to store. 

As you can see in the table the premium for the organic foods varies based on the kind of food.  Some organic options are only ~30% more while others are 3-4 times as expensive. 

It may make a little more sense to look at a grocery bag full of food.  If you went to the grocery store with the above list and bought everything in typical quantities then you'd spend a total of $24.30 for the regular foods and $44.06 on the organic versions.   Thats an 81% total premium for the organic grocery list.


December 16, 2012

How Frequently do Employers make 401k Contributions

Recently IBM announced that they would switch to making their 401k matching contributions on an annual basis.   That saves them some money and probably helps retain some people to the end of the year.   According to a news report on the topic only 9% of employers make 401k matches on an annual basis.   My employer is one of those companies as our retirement contribution is made annually.   Its not a 401k match but instead a contribution to a separate retirement account

In the WSJ article Benefits Leader Reins In 401(k)s they have a graphic from Aon Hewitt showing the distribution of employer 401k matches.   I'm reproducing that graph here :

Source : Aon Hewitt, WSJ

As you can see the vast majority of employers simply make the matches along with your regular paycheck.   However a minority of employers like IBM and my company make matches at different periods.


December 14, 2012

Best of Blogs for Week of December 14th

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

Apex continues the rental series at FMF with Real Estate 101: Taxes

Bargaineering says you should Never Buy Expensive HDMI Cables [SCIENCE!]
which is a point I made about 3 years ago when I said Don't Over Pay for HDMI Cables

PlanetMoney updates their article U.S. Jobs Lost (And Gained!), In Two Graphs
they also loon at a couple housing cost metrics with Are Houses Cheap Right Now?

FMF is running a FMF $25k Red Kettle Challenge
for The Salvation Army

RetireBy40 asks Are Organic Foods Worth The Premium?


December 13, 2012

Household Income Distribution for Senior Citizens

Most senior citizens, aged 65 or older, have relatively low household incomes.    Median household income for people over 65 years is just $33,118 compared to a median of $50,054 for the entire population. 

I got 2011 data from the Census Current Population Survey Table HINC-02. Age of Householder--Households, by Total Money Income in 2011, Type of Household, Race and Hispanic Origin of Householder 

The census data breaks it down into chunks of $5,000 up to $200,000.  But I'll show it in fewer chunks to simplify.

 Here it is broken in a couple charts :


50% of senior households have income between $5,000 and $30,000.

18% of seniors make under $15,000 a year.   
11% of senior households have incomes of $100,000 or more.   
At the top, 2% of seniors take in $200,000 or more.


December 12, 2012

Six Chances to win $2,500

Several personal finance blogs are currently having contests to win $2,500. The list of blogs with links are below.   To enter the contests you have to sign up for the blogs email feed and fill out a short survey.

  1. Wealth Pilgrim $2,500 cash giveaway
  2. $2,500 cash giveaway
  3. $2,500 cash giveaway
  4. $2,500 cash giveaway
  5. $2,500 cash giveaway
  6. My Money Blog $2,500 cash giveaway
Fairly good odds to win some money across all these contests.

Some good blogs there I regularly read #2 and #6 myself.


December 10, 2012

1000 United miles and 500 AA miles

Couple articles from MyMoneyBlog have ways to get some free airline miles :

1000 Free United Airlines Miles from
You have to sign up for Bckstgr then link to Facebook, Twitter and Foursquare to get all 1000.   If you don't want to link to services then you can get 400 miles for simply signing up.

500 Free American Airlines Miles
Just like them on Facebook and do a survey.


December 6, 2012

What Percent of Tax Filers Itemize their Deductions?

The other day someone on The Simple Dollar asked about cash donations to churches and Trent pointed out that most people do not itemize their deductions.   I'm not sure if thats common knowledge or not but most people do NOT itemize their taxes.    Whats that mean?   It means that they do not get any tax benefit from deductions like home mortgage interest, property taxes, charity deductions, medical expenses or the other misc. items that you can deduct as itemized deductions.    When we file our taxes we take either the standard deduction or the itemized deduction depending on which one is higher.  So if someone takes the standard deduction then they either don't have any itemized deductions to claim or they add up to less than the standard deduction.  

How common is it to take the itemized deductions?    In 2009 about 33% of tax filers claimed itemized deductions and the other 66% took the standard deduction.

 '09 is the most recent year that IRS has the full data.     I looked it up on IRS taxstats and specifically the 2009 figures for publication 1304 table 1.2

The rate that filers itemize deductions is going to be lower for lower income individuals as they are less likely to have high expenses.    Higher income people are more likely to itemize since they have a lot more expenses.

I broke down the trend to show how itemized vs standard deduction looks when you consider different income levels and here's a graphic:

Note, to make the graphic more clear I didn't include the approximately 2.5 million tax filers who had negative income levels.

Thats a pretty clear trend.   Of course there are always notable exceptions, but by and large the low income people take standard deductions and highest income earners file itemized deductions.


December 4, 2012

You Don't Need A Lot of Horsepower

Imagine yourself driving a genuine vintage 1960's American muscle car with a big rumbling V8 engine.   When you push down the gas pedal you can feel it rumble as the the entire shudders.  The growl of the engine sounds like a caged monster.   You couldn't possibly need more power than that could you?   Now imagine yourself getting beat in a race with a Toyota Sienna minivan.   Because that could happen.   ( before anyone take me wrong, I'm not saying all minivans today can beat any muscle car from the 60's but a V6 Sienna could beat a 60's era muscle car with one of the smaller V8 engine options.)

Todays Minivan : Faster than a Muscle car
That was me driving the 1960's era car with a V8 when I was 17 years old.   At the time back in the 1980's I had one of the fastest cars in school.  I remember timing myself doing 0 to sixty at around 8 or 9 seconds.   But that Sienna minivan goes 0 to 60 in under 8 seconds.   At least according to the site Zero to 60 Times as well as Edmunds testing at 7.9s.

I like watching Motorweek on TV and I've been casually shopping around for my next car.   I'm struck how talk of performance and horse power has shifted over the years.   If a car has under 200 horsepower it seems as if its deemed lacking and going 0 to 60 over 9 seconds is considered poor performance.   Yet just 20 or 30 years ago these numbers would be considered good for a performance sports car.

Do we need more horsepower today than we did when I was in high school?   I don't think so.   In fact I can only recall twice in my life that I really felt I needed more horse power.   Once was driving a 1980s Dodge hatchback with a 1.7L Volkswagen engine that put out a whopping 75 horsepower.   I was trying to merge on the freeway after stopping on the shoulder and had trouble getting up to speed without getting run over.
75 horses just couldn't do it.     The other time was driving a 1996 Kia Sportage as a rental car up a hill on the freeway.   That Kia had 130 horses.     By comparison I drove a lighter Dodge Neon for many years with 132 horses and it was plenty fast and had more then enough power to sprint up that same hill at highway speeds.  My thoroughly average 2004 Toyota Camry has 157 horsepower and gets along just fine. 

That 60's muscle car had plenty of horses and in fact it felt at times like it had too much.  Yet todays modern cars are faster with more and more power.  

This report from the EPA titled Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975 Through 2011 points out that as of 2010 the average horsepower was 214.   And here's an illustration from the document of the longer term trends :

As you can see cars have gotten more and more powerful and the performance has gone up at the same pace.   Todays supposedly  'sluggish' Toyota Prius would be far faster than the average car of the early 1980's in a 0 to 60 race.

Why do we need more power today?    Simply put : we don't.  People want more power but in general we do not need it. Sure its fun to drive around in a fast car with a big engine, I'm not denying that, but the idea that we 'need' more power is wrong.   Your typical subcompact or hybrid is actually plenty powerful for normal daily driving uses.

Now of course there are exceptions where more power is of real use such as heavy duty trucks for construction or towing a big boat or something like that.   But I'm thinking of the typical driver in a family sedan with over 200 horses like the 2013 Hyundai Sonata that boasts 274 horses.   Thats about 75% more power than my 2004 Camry, which is simply unnecessary.

Next time you're looking to buy a car don't get stuck in the idea that you 'need' a more powerful car.  Todays average cars have more than enough power and in fact the below average cars do too.

Personally I think the 155 hp in my Camry is just fine.    How much horse power do you think you need? 

Toyota Sienna photo by MSVG 

December 2, 2012

Understand Your Spouses Financial Priorities

I think one common problem between a couple is that they may have quite different financial priorities and may not even realize this.    This can easily lead to tension and arguments because you both mistake how important some things are to the other.   Its important to have a clear idea of where your partners financial priorities are.    Their priorities may differ from your own priorities.   You may have an idea that your spouse considers some things more important than you but you may not have a clear idea of exactly how important they consider it.   Maybe you get into an argument about whether you should pay down a loan or put some money in the bank.  Its helpful to know if your spouse considers paying down debt to be their number one priority or if they think money in the bank should be the first goal.

Here is a simple way to get a clear picture of each others priorities : 

1. Each of you take a piece of paper and then write down your top 10 financial priorities in order of most important to least important.
2. After you've each created your lists then swap the lists and compare.

You may be surprised what your spouse considers higher priority.  Hopefully you're mostly on the same page as far as priorities but theres likely to be some notable differences.  After this exercise you should have a better understanding of your spouses reaction to some spending and saving decisions. 

I rarely delve into couples advice but I think this one is particularly useful.


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