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Cost of living in California

When I first moved to California from the East coast, I felt like I have moved to the 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, drench in ultra modern cities on one day and get away from all the civilization the next day… These advantages are touted in every tourist magazines. There are some advantage that you can experience only by living here

  • Excellent farmers markets and Community Supported agriculture
  • Lot of world class restaurants (Warning : Our Chefs will put a huge dent in 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 CultureBig Sur

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.

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
Minimum Wage $8.0 $8.00 $9.79 $8.0


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.

Income Home Price Chart USA California

How much do we back pay to live in the golden state?

Taxes in California is 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 filling jointly)

Property Tax : Property 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.

Home Prices California vs USA

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 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?

Yes, we do. Even though the milk price averages (see the table below) at $2.91 per gallon, it is usually on sale for $2.69. Regarding groceries we are at an advantage. California has produce season almost through out the year. So farmers market 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 spent around $200 per month for 2 people. We buy mostly veggies, fruits, dairy, whole grains (quinoa), lentils 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
Dozen eggs $1.99
Electricity (cents per KWH) 11 18
Natural Gas (per 1000 cubic feet) $10.21
Car Insurance $1313
Home Insurance $717
Gas $2.93 $3.05
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 got the red.

California gas price heat map

The following chart shows the change in gas price over the last 2 yrs. Blue line shows the price for national average, red line – Los Angeles and green, San Francisco.

2 years gas price

We consistently bead 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: These are 2010 prices. This is a slightly different version of a guest post I wrote for frugal zeigeist on Sept 2010.

{ 32 comments… read them below or add one }


Ahhh it’s so NICE there. If I ever move to California (which I would love to) I am going to be in for a shock with prices. I was just thinking yesterday – I can buy a house in Atlanta now, or I can stick with paying super cheap rent in a somewhat uncomfortable house for the new 4 or 5 years, and use all the savings for a downpayment in California. Except I’m worried that the house I could afford in Cali after saving for 5 years won’t be as nice as the house I could afford in Atlanta today!


Jon - Free Money Wisdom

It is nice here. I love it. I lived in rainy Seattle, WA for most of my life and coming to California has been a much need respite. However, I do have to warn most of you — get a job that pays! Taxes are a killer and so are living expenses. Fortunately, I found a great place for a steal. Most are not so lucky.


My University Money

So much different than my rural life in Canada… I paid 95K last year for my 4bd/1.5bath, with an extra lot and a 3 car garage. I can’t believe what the rental rates are out there. You would have to make 60K a year just to live at all! I’ll take my little patch of heaven (California would make me severely claustrophobic after a week or so).


Jeffrey Trull

Wow, in terms of the cost of living, there doesn’t really seem to be any good news there. Some of the benefits you listed in the beginning sound great, but I think I’d have to hear more before deciding to move to CA.



Wow! That is a lot to take in. Due to my husband’s industry, we’ve talked about the possibility of moving to California but now, we have even more to consider. Thanks for providing this information!


Crystal @ Industrial Special Risk Insurance

Whoa! That is expensive! Our cost of living in Houston seems to be less than half of the norm up there. But you do have one heck of a view and not nearly as much as humidity as we do… :-)


Robert @ The College Investor

You know, people bash the higher costs of living in California, but I think its actually cheaper to live than elsewhere. Here are some thoughts: live where it snows, how much do you pay to heat your home? In So Cal, we never use heat or AC as it stays a nice 70 all year! Home maintenance from snow? Non-existent. Rougher on your cars (cold, salt, etc.)? Nope! Hurricanes, tornadoes, floods, heat waves? Nope, nope, nope, and nope!

I think when people look at costs, it really becomes a wash, so enjoy California living!



I am going to disagree with you Robert :) When you say it stays 70 are you talking about coastal regions? Like La Jolla, North county coastal or anywhere near the ocean. The heat has been killing us in the LA Valley area. We have been trying to restrict the AC use to 4-5 hrs a day but I am sure our energy bill will shoot up this month. It is like this 3-4 months an year. Yes, it is absolutely better than snow, but it is not always heaven. And not all places get Hurricanes and floods all the time. Yes the scare is there, but so is the earth quake and fire scare in CA. We still pay quite a bit higher as renters insurance than what I paid in the east coast.

I am not denying it is better than shoveling snow or have hurricanes all the time. But it has its own set problems as well and I am not sure the price tag is worth the extra comfort. It might be but at this stage I am not sure…



It is timing! I moved here 40 years ago, I managed to ride the real estate values up and avoided most of the slide. My real estate taxes are low because I bought this house 14 years ago. Income taxes are a little higher than other places, but the weather can not be beat!


Amanda L. Grossman

What a great analysis of California livin’! I have always been fascinated with California (as in wanting to visit there, travel, or live there for a few months), but have never desired to live there. Hopefully we’ll get to wine country sometime soon!



When I was in grad school, I had job offers in different locations throughout the country. One of them was in the San Francisco area.

When I got my offer, I found it to be equivalent to what I was being offered in Chicago, for an equivalent position. Note that Chicago is by any means a low cost of living locale, because it’s not. It’s pricey relative to the national average. However, San Francisco’s cost of living is most definitely higher, really at the high end in the US along with Manhattan.

So, the HR person tried to justify it by saying that I’d be paid in “quality of life”.

Ha! I must have had one of those “You’ve got to be kidding me!” looks. I didn’t take the job there, and took the one in Chicago.

I have family in the Bay Area, and have visited many times over the years. I’ve been to that area probably 15 to 20 times in my life, for varios reasons – family or work. I know how the quality of life can be amazing in terms of weather, natural beauty, outdoor activities, and culture. It’s great, no question about it. A great place to live.

But make no mistake, people do pay for it financially!

A great model would have been for people to buy into California in the 1980′s/1990′s, sell by 2007, capture the gains and move elsewhere. Of course, that would mean leaving the California lifestyle, which many seem to have trouble doing. I have family that moved from there and moved right back to California!



My husband used to live in California, and I was shocked at the taxes he paid. High taxes + high housing prices = avoid CA unless I can afford to live at the beach despite that ;)


101 Centavos

Both the Mrs. and I are refugees from the SF Bay Area. While we love the quality of life out there, and may yet move back someday, perhaps in a more rural setting, but for now Tulsa, Oklahoma is just fine.
We meet other Cali refugees here from time to time, and the sentiment is universal.
I just heard about that there’s a legislative proposal in San Francisco to consider making ex-cons and felons a protected class with regards to employment. Truly a WTF moment.
Great article, Suba!


Money Beagle

I visited California around the year 2000. One of my first impressions was that southern and northern California really seemed like two entirely different states, both in terms of weather and even how people acted. I also noticed how darned expensive housing was. I had just purchased a 1300 square foot condo in Michigan the year before for around $125k, and I was blown away to see that something comparable would probably run me $350-400k out there. Mind blowing to say the least.



So funny you should mention that about the southern part and northern part because I noticed that too. While I found California beautiful, I could not deal with the high prices and traffic!



The Spelling Mansion is exquisite…just a little out of reach for me right now!

Great overview Suba. California has a lot of upside. I was lucky to have lived there for three years from ’05 to ’08 – in Monterey, just south of San Francisco. I can appreciate the expensive real estate, the awesome farmers markets, and the wonderful diversity of people and landscapes. The school system was a major issue for us. The state had cut budgets so much that there was no room left to teach computer lab, PE, and science at our elementary school. The PTA banded together and had to raise $94,000 to hire teachers for these programs…and they did it. They secured contracts to provide services for major golf tournaments (Pepple Beach), and a major Bicycle event, which covered most of it. Unfortunately the local school board learned of our success and took the money to share it with the other schools in the district that were not as successful at fundraising. What can you do?

I would move back there in a heartbeat…it’s closer to Australia.



I just moved out to Los Angeles, and seeing some of these numbers scares me. Right now, I’m focusing on the weather, but it’s clear I’m going to be paying more than my friends across the country for the same things. Hopefully I’ll get a higher income to offset it!


Kay Lynn @ Bucksome Boomer

I agree with Money Beagle that NoCal and SoCal can seem like two different states. It’s very different in terms of economy, weather and politics.

It is very expensive to live here in general but that’s because so many people want to live here! I do think we have an advantage over many East Coast states in terms of our property taxes. If you hang on to your home, you end up paying very little comparatively speaking. My husband and I pay under $800 a year because it’s assessed when prop 13 went into effect.


Buck Inspire

Great article. The housing prices are insane, but weather is mostly comfortable. It does get hot in the summers at times. Don’t see myself moving yet. There is an electricity here that’s hard to explain!



Thanks for the research on this subject…..I thought I was going crazy! My husband and I have three children. We are trying to raise them on one income in So. Cal. They are in an excellent charter school and we do not pay for childcare. (I stay home, one is still not in school yet). We have an average income which includes my husband working ALOT. We bought a forecloser home (sold as is by the way) and still cannot keep with the cost of living here. You might want to change your bread prices. I have yet to find a loaf of bread for .99! To buy a good quality loaf of bread is at least $3.00 Sometimes you can get on sale for $2.00. More often than not I see loaves of bread for $4.00. Just the other day I saw an average bag of chips or over $4.oo! Yes, you can save at farmers market on fruits and veggies, but I think you should look again at bread prices. Thanks again for this info on the cost of living in Ca.


John G

Hi Rilke,
Planning to move to SC with my family from London. Like to know what level of income can make a comfortable living. Wife 2 kids, definitely a safe neighbourhood. 1 income. How much do schools cost? Appreciate your comments.
John G



What an interesting post. And I am ashamed to admit, I had trouble getting past the first part about the beach!
Sign me up! I don’t care about housing/gas/food prices! I want the beach!



Oh California how we love your beaches, weather, and produce but man we really DO pay for it! -Sydney


Little House

Excellent post on the pros and cons of sunny CA. I’m also surprised that the median home price in Southern CA is in the mid $200′sK. In my neighborhood, homes are still selling well above $500K. We rent a 2 bedroom apartment for $2195 a month with no utilities included. However, it’s a really large 2 bedroom, so not too many complaints there.

However, my husband and I have started looking at moving to the central coast of CA. It’s slightly less expensive than SoCal (but not much) with cleaner air and beautiful vineyards lining the rolling hills. It’s still a couple of years away and the prospects of getting a teaching job could change our plan, but we are set on living somewhere in CA.



Hmmm…that doesn’t seem so bad compared to living in Chicago. Our state tax rate just went up in 2011 and it’s now 5%. $1200 in rent a month for a one-bedroom apartment? That’s about comparable to what one pays to get an apartment in the more popular areas of the city. Sales tax in Chicago is 10.75%. Yep.

I’ve been to SoCal, NoCal and Central Cal. I didn’t care for the LA area at all, and while the SF Bay area is awesome it is very pricey. I loved Central CA, though, and dream of moving to Pacific Grove some day. :-)



Thank you for this thoughtful piece. As with most everything in life, there are pros and cons. Analysis helps us understand and make an informed choice.



I love living in California. I live in an area where it’s very rural, not a lot of traffic or white noise. The prices of gas and housing, however, are insane. Me and my fiance’ can’t afford it since we are starting a family, and he wants to move us to the city. :( We might end up having to move out-of-state away from family and friends because you need to make 40k a year to not be homeless at all here.



1) I crave for all-season great california climate in California warm < 80 degrees.
2) I want to save driving time staying away from high-traffic zones. I do not want to waste time driving up and down to work those 2-3 hrs of every day —- defeats the purpose of not enjoying great outdoor time during weeks days as well.
3) We want to live out in California for atleast 2-3 year before our current one-yeay old daughter grows up….and settled down if we like it.

I can compromise:
1) I am ok to live in a smaller house(I live in 4 BR independent family house in memphis,TN — $1300 mortgage)
2) I am ok not to be to closer to beach..I love driving, so I can drive around to get to what I want if it is in 3 hrs
3) I am not big into show-off/status oriented/action-packed big city centers — just love great outdoors/athelitic activity — njoy myself.

1) We have but have a 1 year old baby girl — which city/county area in California is good fo kids too ?
2) Me and my wife make $80K plus per annum in Memphis now(in computer/tech industry) — we want to move only if both get paid same or more…..no loans left..just to get rid of our current house and move…which specific city/county area is better in California(LA outskirts ?)
3) Which area is better to buy a house(3 BR) and how much wud it cost(we can afford < $450K)– as housing market is down ?



Ever since Prop 13 passed, infrastructure and education has taken a huge hit. The monies from prop taxes PAID for those quality of life issues such as excellent public schools and colleges, decent roads, utilities and so on. Once it was shifted to individual towns, cities and counties, the true economic disparities began to widen and become more extreme.

for the current take on the effects: http://www.sfgate.com/opinion/article/Prop-13-doesn-t-fit-California-s-new-economy-3251157.php

I understand that what stats say about SoCal and the rest of the country that housing prices are lower. But you have to factor in more variables. Weather: it is becoming more extreme as we go forward.

Hotter and drier in semi-arid to arid; wetter in others. As mentioned above, how much do you spend on utilities and especially water. Water is the new gold. It varies in quality. It can become contaminated and unusable for the foreseeable future.

What good is a cheap house without access to clean water?
SoCal and Central Cal rely on water imported from other areas-it cannot sustain their amount of growth currently and for the future. There is a limited amount. Let’s see how things go in the next five years when the other parts of CA are not allowed to siphon off more water from the Delta and NorCal in general.



I lived in San diego with my girlfriend and rented a little bungalow for $1000 a month. It was a great little place a few blocks from the beach and I loved it. Rode my bike everywhere, including work. Not a good idea if you’re looking to buy a house,unless you have a well paying job. Personally, I wouldn’t trade my time there for anything. Going back soon actually. :)



I have lived on the Central Coast of California my entire life, and even those of us that are true California natives are being priced out of the state. My husband and I are actually looking at moving to Hawaii because houses on the Big Island are so much cheaper than here, even cheap enough to make up for the increased cost of daily living. If anyone wants to move to the California coast from another state, be forewarned: you are in for sticker shock! Higher housing costs, property taxes, sales tax, vehicle fees, gas prices…they all add up, even for those of us that are “used to” them. What many may consider paradise comes at a high price! Our mortgage payment is almost $3000 per month for a two-bedroom PUD with a sliver of an ocean view from our kitchen window. We live in what is considered a small beach town, and it gets more and more crowded every day. Many motorists drive like idiots and don’t carry auto insurance, even though it is required. Before you move here, consider the cost all around!



Yes, John. You are fortunate like me. I pay only 364.00 dollars for my 4 bedroom and 2 bathhouse. Only 10 minutes from Los Angeles County. However, the only problem I have is that my wife just got unemployed and I am retired. So, with my 7 children, I am struggling. If it was not for my low mortgage, we would be starving. My house payment is low because I gave a large down payment and I got it for only 85,000 dollar when the house sold on the market of 2008 for 300,000. Soon when my wife starts working, we can enjoy going to places with the children. Good luck to those that moved to California. I am warning you, it is very expensive if you only Rent. So, buy a house is my advised. But not in Los Angeles.


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