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Old 04-16-2015, 08:57 PM
 
7 posts, read 5,986 times
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Hi All,

I currently work a job that pays around $60K in Denver. The company I work for just told me they would be really interested in having me move to the LA office and that they are willing to consider an increase in salary to adjust for increases in cost of living. However, they want me to initiate the negotiation process by telling them how much I want the salary to be increased by. Here is where my question lies - what factors should I look into when coming up with this figure? I don't want to ask for too much and come off as greedy but at the same time I do not want to ask for too little and sell myself short.

Here are a couple of methods I am thinking of using to calculate my increase in salary. I would appreciate it if you could tell me which one is most likely to lead to a higher increase in salary. Furthermore, which one is most likely to be accepted by the company?

1. Take the average of online CoL adjustment calculators - I have been using a few CoL adjustment calculators on the internet and most of the calculators suggest that the salary would need to be bumped up to about $75K for me to maintain the quality of life I enjoy at Denver. Then there was one calculator that told me it should be only increased to $66K and another one that said it should be raised to $82K. There is some variation in these figures but there seems to be a strong average at $75K. Do you think I should just take the average of all the online calculator figures and ask for a raise to $75K?

2. Go all out and construct a detailed budget in excel - An alternative to using the online calculators is for me to buckle down and present a super-detailed budget using average cost figures for both locations for rent, utilities, transport, groceries, eating out, shopping, state taxes, etc. This will involve a lot more work on my part but it could also uncover some hidden increases in CoL that the online calculators did not account for, thereby increasing the figure for my new salary. There are a number of reasons why my method may result in a higher figure. Firstly, I am assuming the online calculators scale the prices with the assumption that a person will be consuming the same thing and living in the same type of accommodation in both locations. However, this is not entirely true in my case. I am currently splitting a 2BR with a friend in Denver but might be forced to live in a 1BR in LA since I don't know a single person in the city and am not comfortable living with random people I find on the internet. Since 1BR apartments are generally more expensive than 2BR apartments I expect my rent to increase more than if I had just gone from a 2BR in Denver to a 2BR in LA (which is what I assume online calculators assume). In addition, I currently have an arrangement where I am splitting my friend's car so I pay half price for parking, gas, etc, and I did not have to pay for the purchase of the car. If I go to LA, I might have to buy a car and pay full prices on everything related to the car since I don't know anyone I can split a car with there. This means that I will be paying about $5K extra to buy the car and maybe an additional $200/month or so to keep the car around. There is no way the online calculator would take this into account. Lastly, the tax rates are different in LA than in Denver. I am not sure if the online calculators account for this but if they don't, I think I can definitely get a figure that is higher than the online calculators using a manual method.

My concern with this method is that I don't know if the employer will buy my calculations and assumptions. All of this is incredibly specific to my situation and I am afraid the employer might just ask me to use the more general online calculator approach and leave it at that. These are all genuine concerns but I don't know if the employer will care that I can't live in a 2BR apt in LA with strangers? This seems reasonable to me but what do you guys think?

Anyway, those are my questions. I am sorry if it looks like I am overthinking this. I just really want to make sure that I take every little detail into account and do not come out poorer as a result of this move. Additionally, feel free to give me suggestions for other ways in which I can approach this process.

Last edited by FooFighters; 04-16-2015 at 09:03 PM.. Reason: Forgot to mention per month
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Old 04-17-2015, 01:22 PM
 
3,280 posts, read 3,846,166 times
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I'd say at least double your salary. LA is extraordinarily expensive.
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Old 04-17-2015, 01:28 PM
 
Location: The Springs
1,770 posts, read 2,146,926 times
Reputation: 1850
This link may help you:

Cost of Living Calculator: Compare the Cost of Living in Two Cities - CNNMoney
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Old 04-17-2015, 01:29 PM
 
Location: Nashville TN
4,925 posts, read 4,930,189 times
Reputation: 4778
Tell your boss to give you at least 300k a year if you have to move to LA
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Old 04-17-2015, 01:31 PM
 
Location: Miami Beach, FL/Tokyo, Japan
1,699 posts, read 1,603,137 times
Reputation: 722
LA is not very expensive, except for 1 area, housing. If you're renting it won't be that noticeable, but as soon as you want to buy.

I suggest you look at the neighborhood you want to buy, and look at the house median value there and compare to the place in Denver.
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