All About the Cost of Living in California

Evelyn Long

May 20, 2021


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Whether you’re already living in California or you’re considering moving to the sunny golden coast, you’re probably wondering what the cost of living is like, and how it compares to living elsewhere.

While the cost of living depends on your specific lifestyle, and the comparison will be different based on where you come from, you can still get a general idea of what the move will be like for you should you choose to move out west.

Whether you’re asking yourself about the exact cost of living, the price of rent, the housing market, the local minimum wage, or what “cost of living” even means, we’re here to help you out.

California is a large state with varied cities and communities. There are plenty of practical places to create the life you want. Here are some answers you might be searching for about the cost of living in the state of California.

What Is the Cost of Living?

Before diving in, we should cover what “cost of living” actually means.

Cost of living refers to the amount of money it requires to live an average quality of life in a specific area. This includes things like rent, food, and other expenses. Essentially, any cost that might come up in a person’s life.

a man calculating his salary for his cost of living

What Is a Good Salary in California?

A good salary can mean a lot of things to a lot of people. So, we should rely on data that shows average income across the state.

Los Angeles boasts an average household income of around $51,000 per year. Meanwhile San Diego’s is a bit higher at around $68,000. San Francisco is among the highest at around $87,000. These averages tend to correspond with the average cost of things like housing and food in each area.

What Is California’s Minimum Wage?

Another factor in the cost of living is the minimum wage. You’ve probably heard about places where you can buy a house for bottom-of-the-barrel prices and everything is cheap. Those places are usually areas where the minimum wage is lower. With a higher minimum wage and higher salaries, people can afford a higher cost of living.

While the statewide minimum wage in California is $14 per hour, many individual cities have higher minimum wages than that. Los Angeles offers $15 and San Francisco offers $16.07 — both more than double the federal minimum wage.

Is It Expensive to Live in California?

So, how much does a person have to make above the minimum wage to afford the cost of living?

That’s usually called the “living wage,” which can differ between cities, neighborhoods, and even people. It depends on how many children you have, whether you have a commute, and what your expenses are like. While for some the living wage is $12 an hour, for others, it is closer to $20 per hour.

So, is California expensive to live in, or are most residents able to make a comfortable living here? We conducted a survey of California residents to find out. Here are the results.

Renovated Cost of Living in California

At first glance, it may appear that there is a pretty even split between those who can afford living in California and those who cannot. While the highest percentage of participants make enough for their lifestyle, they are closely followed by those who do not.

However, a closer look will reveal that there are more people struggling to make ends meet than there are wealthy Californians. Nearly 30% of California residents reported not making enough for the cost of living and 16.97% more say they have to make sacrifices to afford the life on the west coast. Another 17.61% say that their budget is rather tight, but they find a way to make it work.

That means more than 64% of Californians could live more comfortably or be able to afford the California lifestyle with a slightly higher salary.

So, what does this mean for those considering moving to California? Think twice before packing up your things.

Consider how much you make already. Does your hourly wage fall below California’s $14 minimum wage? If so, you may want to ask for a raise before making the move. Of course, you should secure this promotion well in advance and budget for other necessary expenses to ensure you truly can afford the Cali lifestyle, even with more income. If, however, your hourly wage matches or exceeds the state minimum, you may be able to afford a Cali lifestyle without having to worry about finances too much. This is especially true if you plan to move to NorCal because it’s typically more affordable than its southern counterpart.

Still, it’s important to consider how much groceries, gas and other necessary purchases will affect your overall cost of living. After all, rent isn’t the only expense you should base your decision on. Are you someone who likes to go out and party on the weekend? Do you enjoy shopping and sightseeing? Even at $17 an hour, you may not be able to afford such an extravagant lifestyle. In this case, you may have to make some major sacrifices to post up in your desired location.

California dreamers should also plan for the long term in regard to their career and income. Is your industry popular in California? Are there opportunities for career growth in your desired area? Prioritizing long-term job security will help you feel more financially stable and provide a steady stream of income so you can afford the rising cost of living 20 plus years down the road.

For instance, if you work in the manufacturing or oil industry, the Central Valley may be a great place to call home. However, if you have a career in technology or medical science, you’ll have an easier time finding a job in Orange Country and Silicon Valley.

Of course, the cost of living can skyrocket in big cities like Palo Alto and Laguna Beach. Here, rent is astronomically high compared to suburban and rural areas. So a lucrative job still might not provide enough cash to afford the cost of living.

Therefore, you must carefully compare your income and expenses to make your finances are still in the green at the end of the month.

Should I Buy a House in California?

In terms of the housing market, each city and county will have their own set of rules and principles. Really, it all depends on what you want.

If setting down roots and buying property in California is important to you, you might want to consider moving forward with the process of wading through the competitive market. However, the California housing market is slightly more saturated and a bit more expensive than other places.

Should I Live in NorCal or SoCal?

California is a big state with a variety of communities and cities, and so many opportunities for finding a place you want to be.

That said, many people find the difference between living in Southern California and Northern California to be one of the most observable and stark.

While the culture of Southern California is a bit more traditionally Californian, laid back, and beachy, NorCal has more seasonal weather and a booming tech industry.

However, NorCal tends to be a bit more on the expensive side, as San Francisco is the second most expensive city in the United States, while San Diego and LA don’t even crack the top five.

los angeles boat ports on the ocean

The Best Places to Live in California

If you’re looking for some great guidance when choosing a place to live in California, the larger cities are always good options if you like that sort of thing.

Los Angeles is great for entertainment industry creatives, San Francisco is a bit more professional, Sacramento is a bit more suburban, and San Diego is more beachy and laid-back.

However, here are some other great places to check out in California:

  • Fresno
  • Ojai
  • Pismo Beach
  • Tahoe City
  • Carlsbad
  • Encinitas
  • Alameda
  • Oakland
  • Carmel by the Sea
  • Eureka

These towns, and so many more, are great places to check out in California, especially if you’re looking for a community outside the bigger cities.

Understanding the Cost of Living in California

California is an amazing state filled with nature, community, and people of all walks of life. While it gets a reputation of being expensive, there are so many diverse and varied experiences that you can have in California. It’s all about where you want to go.

Cost of Living in California by City

Los Angeles

San Francisco

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