Cost of Living in Texas

Posted on by in Cheapest Places To Live, Saving Money & Finances

cost of living in texasThis article is part of the Cost of Living by State Series and is a guest post by Crystal at Budgeting in the Fun Stuff. Her blog covers living expenses, saving for your future, and the fun stuff along the way.

There are many benefits of living in Texas, but the most well known is that our cost of living is pretty low. In fact, Frugal Zeitgeist even has a post about it here. Mr. BFS and I live in a suburb outside of Houston, TX and I am constantly surprised with how our costs compare to those that my readers bring up. When Forest asked for some state by state breakdowns, I thought that bragging on Texas was right up my alley. ;-)

Although Texas is huge and you can obviously find cheaper and more expensive areas, I will be listing the info for Houston, TX that I found at Sperling’s Best Places. My personal info comes from owning a home since 2007 and renting from 2005-2007 before we had enough for our 20% down payment.

Income – Median Household Income of $43,510

Mr. BFS and I both work, so we are able to bring in a bit more – $82,500. As a school librarian, hubby makes $47,500 annually before taxes. I make $35,000 annually before taxes as a cubicle worker – my job is 50% customer service and 50% advanced clerical work. I’m currently in the market for a new position if anybody has any ideas in my area. :-)

Taxes – No State Taxes but the Median Property Tax Rate is about 2%

Since we live in one of the greediest nicest school districts around Houston, our property taxes come to about 2.5%. Thankfully we bought a cheaper home, so that’s “only” about $2250-$2500 a year for county taxes, school taxes, and utility district taxes together. We don’t escrow, so I contribute $300 a month to a Smarty Pig account for this goal and use it for the property taxes and our $750-$800 homeowner’s insurance every year.

Housing – Median Home Price is $156,120

Mr. BFS and I wanted a house we could easily afford even if one of us became unemployed, so we looked at starter homes that were less than $130,000. You can take a look at How We Chose to Buy Our Home for more details. When we saw a 3 bedroom foreclosure that had 1750 sq.ft. and was built in 2004, we snagged it up for $114,000. It was in nearly perfect condition and only needed all the basic appliances, so it was an easy decision to make an offer. Foreclosure deals take way longer than regular house hunting, so I’d suggest patience if you ever go that route.

The median rent in Houston is $600, which seems right to me. When Mr. BFS and I first got married in 2005, we lived in a 550 sq.ft. 1 bedroom apartment for $400 a month. It was pretty cozy but a girl can only take midnight computer gaming in the bedroom for so long. We upgraded to a 1000 sq.ft. 1 bedroom for $730 a month in 2006. That was a nice apartment about 2 minutes from my job…if we hadn’t bought our own house, I may have talked hubby into staying there forever. :-)

Groceries – Houston was Rated at 85 compared to the US at 100 on the cost of living index

Food is comparably less expensive in Houston than almost anywhere else I have visited or lived – that would include at least 15 states, 9 other countries, and countless cities throughout.

Milk is currently about $2.50 a gallon. Eggs at Kroger are about $1 per dozen. Bananas are less than 50 cents a pound. An average meal in a chain restaurant like Chili’s runs $8-$10 unless ribs are involved. ;-)

Mr. BFS and I spend at least $400 a month on food (more like $500), but we aren’t nearly as frugal as most personal finance bloggers – you can check out our food budget here.

Our staples include small steaks from Sam’s Club at $2.97/lb, boneless chicken breast at $2.15/lb, potatoes at $1/lb or less, frozen veggies at $1/lb or less, and Nature’s Own Honey Wheat Bread at $1.88 a loaf. We also eat at local restaurants for about $7 per person. The only place I have ever been that the food cost less overall was Argentina from 1997-1999.

Overall, the cost of living is low enough that Mr. BFS and I can live very happily on a majority of his salary, play with the rest, and save all of mine for early retirement or other long-term aspirations. If I currently lived on one of the coasts and could rake in the dough, I’d stay long enough to build a nest egg and then retire somewhere around here. The mass transit is awful, but a solid stack of cash could buy you a very early retirement in a city that does have the hustle and bustle in one part, suburbia dreams, or pure serenity all within a half hour drive.

What do you think? If you live in Texas, do you stack up to the medians and averages? If you live outside of Texas, did any of this catch you by surprise?

Texas Cost of Living Chart

As part of the cost of living series we are trying to get together essential living costs into handy spreadsheet charts. Here is the in progress chart for Texas. Feel free to suggest additions or provide data in the comments.

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18 Responses to “Cost of Living in Texas”

  1. Kevin@InvestItWisely

    30. Aug, 2010

    :O

    Housing is about 2x to 3x more expensive where I live, and so is food. Taxes are probably significantly more than what you pay in the lone star state. 14% sales tax and an income tax that eats up quite a bit. You’ll pay about $25,000 income tax alone on that salary, and est. $36,000 total contributions.

    In spite of all that, salaries are similar. You would probably be getting low $40s for your job, or maybe not… it’s very similar!
    Kevin@InvestItWisely recently posted..Weekend Reading- Canadian Housing Bubble EditionMy Profile

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  2. Andy Beveridge

    30. Aug, 2010

    That all seems so much better than here in France. We moved over from the Uk a few months back, and I must admit that we thought the cost of living would be better.

    House prices are in freefall in europe at the moment and you do get more property for your cash here. Food and general living is a little dearer than the UK.

    Hey! wine is cheap, what more can you want?

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    • Forest

      30. Aug, 2010

      Wine is a fine substitute for food and water….

      I found France expensive but life is more relaxing so you often find you have less desire to get away and spend a load of cash to get away from things…. Live is simple and easy.

      I hope it’s going great over there.

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  3. Kevin@InvestItWisely

    31. Aug, 2010

    Hey Forest,

    When the Canadian dollar was only 60 cents then yeah, the price disparities made sense. Not so sure that’s the case anymore. Food is much cheaper in the states, now with the dollar being around par. Electronics and things like that tend to be around the same price.
    Kevin@InvestItWisely recently posted..How to Invest in Vanguard Funds Using ETFs — and Save Money While You’re at ItMy Profile

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    • Forest

      31. Aug, 2010

      I think eventually unless things really hit shit creak that the US $ will rise a little more again and bring it back to normal.

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  4. Jolyn@Budgets are the New Black

    03. Sep, 2010

    Texas seems to fit the general thinking that Midwest living is cheaper, which isn’t true at all for all Midwest States. In Kansas, for instance, groceries are surprisingly expensive. There’s income tax, and sales tax, and property taxes are fairly high. I don’t have exact numbers off the top of my head, but lots of my family live there.

    Here in Ohio we pay over $2k for property taxes for a $220k house. Our sales tax is 7% in this area. You don’t pay sales tax on groceries at all! That bit surprised me when we moved here.

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    • Forest

      04. Sep, 2010

      It’s very hard to navigate all the factors that lead to a places affordability! That property tax is high! But maybe you pay $2k a year less in groceries…. Very confusing.

      You wouldn’t happen to want to write a post like this on Ohio would you?

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  5. cash flow template

    13. Sep, 2010

    Yeah you are right, cost of living in Texas is really low.

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