When I first moved to California from the East coast, I felt like I had moved to paradise… miles of beautiful coast line, mountains, national parks, scenic drives, excellent restaurants, a dream come true. Being a penny pincher, slowly the taxes and the cost of living begin to take a toll on me. Now I have a love and hate relationship with my state.
Everyone knows the advantages of living in California (which probably explains why CA accounts for 9.1% of the US population). We have year round good weather, tons of great national/state parks, miles of beautiful beaches, great night life, you can ski and surf on the same weekend, drown yourself in ultra modern cities on one day and get away from civilization the very next. These advantages are touted in every tourist magazine. There are some advantages that you can experience only by living here
- Excellent farmers markets and Community Supported agriculture
- Lot of world class restaurants (Warning : Our Chefs will fill your palate but drain your wallet)
- Lowest cost for attending community colleges
- Better job market if you are in the tech industry or entertainment industry
- Large number of good Universities
- Unprejudiced Culture
But there is a flip side to this paradise. We pay a huge price to live in the golden state. Note: California is huge and the cost of living is very different in different places, so I am giving a rough comparison between Southern (Los Angeles), Northern (San Francisco) & Central CA (Visalia) for most of the major statistics (where applicable) and including detailed personal opinion on Southern CA.
How much do we earn?
The median household income in CA is $61,017. Much higher than the national average but not high enough to keep up with the high cost of living.
|CA||Southern CA||Northern CA||Central CA|
|Median Household Income||$61,017||$68,190||$73, 127||$44,383|
Here is a chart comparing the median income and median house price in different parts of CA (south, north & central), average CA and average USA.
How much do we pay back to the state?
Taxes in California are one of the highest in the country.
Income Tax: The lowest tax bracket is 1.25% and the highest 9.55% (for income > $93,532 for married filing jointly).
Property Tax: Property tax is assessed at 100% of full cash value. The maximum amount of tax on real estate is limited to 1% of the full cash value. Under the homestead program, the first $7,000 of the full value of a homeowner’s dwelling is exempt. Property tax increases are capped at 2% per year.
Sales Tax: The average sales tax rate is 8.75% Tax varies according to locality. Can be as high as 10.25%, Los Angeles county tax rate is 9.75% and San Francisco is 9.5%.
We need to get money somehow; after all we have the nation’s most expensive public school ever.
How much do we pay to have a roof over our head?
Think your rent is high? Try renting in Los Angeles, Santa Clara or Sunnyvale. The median rent in California is $1200 according to the census bureau. If you will be buying your own home, the house prices have come down significantly (or so they say), but it is still expensive in CA, the median house price in California is $211,500.
|Southern CA||Northern CA||Central CA|
|Median House price||$248,700||$396,400||$97,800|
|Rent 2bd Apartment||$1794||$1876|
|Rent 2Bd Single Family Home||$1864||$2069|
Here is a heat map from Trulia showing the cost of buying a home in various states. We are “red” hot. But with this map I think you can also appreciate how different the home prices can be within the state based on where you want to live. You can get a place for $150,000 or if you have a little extra you can go for this $150 million mansion.
The median house price in Southern CA according to the census bureau is ~$250,00 but from my personal experience with looking for houses, a decent 3 bedroom/2 bath room house in a respectable neighborhood, in the suburbs of Los Angeles is around $500,000. We rent a 1 bed/1 bath apartment for $1,200 not including any utilities.
Do you have anything left over to buy food and gas?
Even though the milk price averages (see the table below) $2.91 per gallon, it is usually on sale for $2.69. Regarding groceries we are at an advantage. California’s produce season lasts almost through the entire year. So farmers markets and Community supported agriculture thrive here. It is much cheaper to buy directly from the farmers and the produce quality is excellent. On average, we spend around $200 per month for 2 people on groceries. We buy mostly veggies, fruits, dairy and staples. No meat. Our average power bill for the month runs around $40 for a 1 bedroom apartment. Even if the gas price goes down a lot we are always above the national average.
|Southern CA||Northern CA|
|Gallon of Milk||$2.91||$3.07|
|Loaf of Bread||$0.99|
|Electricity (cents per KWH)||11||18|
|Natural Gas (per 1000 cubic feet)||$10.21|
|University Of California Tuition||$11,330|
|California State University Tuition||$4,230|
Here is a heat map of the gas prices in California. Even here we are red, red, red!
The following chart shows the change in gas price over the last 2 yrs. The blue line shows the national average gas price, red line – Los Angeles and green, San Francisco. We consistently beat the national average. Do I sound proud? Hmm… weird.
We do have some other minor inconveniences like traffic and smog. Looking at the silver lining though, you will get a lot of time while sitting in traffic to think about your future and if you get bored with that there are always a lot of interesting audio books! Nice weather, many job choices (silicon and silicone related ;)), more things to do, breathtaking sceneries, wineries, restaurants, thinner wallet… Is it worth moving to California? What do you think?
Note from Forest: California is a high demand State to live in and I expected the costs to be high but it’s great to have such a fantastic breakdown. Thanks to Suba for a most excellent post. Remember to visit the article Cost of Living by State to link to posts on other States.