This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.
Do you think you make enough to afford to live comfortably in California?
With high inflation and cost of living expenses, it can be hard to feel financially secure, especially for Golden State residents.
Using data from the latest MIT Living Wage Calculator and the 50/30/20 budgeting method, Smart Asset calculated the after-tax salary a single person without kids would need to earn to “live comfortably” in 25 of the largest cities in the U.S., including those in California.
The 50/30/20 budgeting method separates one’s budget into three categories: basic living expenses, discretionary spending, and saving or paying off debt.
The budgeting method calls for 50% of the salary to be used to pay for basic living expenses, for example, rent and bills; 30% would be used for personal spending and 20% would be put into a savings account or used to pay down debt.
The data used in the study analyzed the cost of living in each city as of 2022.
For California cities like Los Angeles, Berkeley and San Diego, a single person must make more than $76,000 to “live comfortably,” the data shows.
This is how much individuals need to make to afford to live in these California cities:
City
After-tax salary needed to live comfortably
San Francisco-Oakland-Berkeley, CA
$84,026
San Diego-Chula Vista-Carlsbad, CA
$79,324
Los Angeles-Long Beach-Anaheim, CA
$76,710
Riverside-San Bernardino-Ontario, CA
$67,060
It’s not surprising that people living in California needed to have high salaries to “live comfortably” in the Golden State.
In contrast, people in St. Louis, Detroit and San Antonio needed to make between $57,000 to $60,000 after taxes to afford a comfortable life. Those were considered the top three places where a high salary wasn’t needed to “live comfortably” according to Smart Asset.
These places don’t require a high salary in the U.S.:
City
After-tax salary needed to live comfortably
St. Louis, Missouri
$57,446
Detroit-Warren-Dearborn, Michigan
$58,358
San Antonio-New Braunfels, Texas
$59,270
Philadelphia, Pennsylvania Camden, New Jersey Wilmington, Delaware
$61,678
Charlotte – Concord- Gastonia, North Carolina
$62,110
Houston-The Woodlands-Sugar Land, Texas
$62,260
I've delved extensively into financial analysis and economic landscapes, particularly regarding cost-of-living analyses and budgeting methodologies. The MIT Living Wage Calculator is a reputable resource that factors in various essential expenses to ascertain the income required for a comfortable lifestyle across different cities.
The 50/30/20 budgeting method is a widely recognized approach. It divides income into three segments: 50% for basic living expenses like rent and bills, 30% for discretionary spending, and the remaining 20% allocated for savings or debt reduction. This method provides a structured way to manage finances while striving for financial stability.
Regarding the specifics in the article about California's cost of living, the figures presented for cities like San Francisco-Oakland-Berkeley, San Diego-Chula Vista-Carlsbad, Los Angeles-Long Beach-Anaheim, and Riverside-San Bernardino-Ontario are a testament to the exorbitant expenses individuals encounter in these areas. For instance, a single person in San Francisco-Oakland-Berkeley requires an after-tax salary of $84,026 to comfortably meet living expenses, emphasizing the high-cost nature of the region.
Comparing these figures to cities like St. Louis, Detroit, and San Antonio, where after-tax salaries for a comfortable life range between $57,000 to $60,000, underscores the considerable discrepancy in the cost of living across the United States. These cities have significantly lower financial thresholds for a comfortable lifestyle compared to their California counterparts.
The geographical disparity in living costs highlights the need for tailored financial planning based on location. Factors like housing, healthcare, transportation, and other essentials significantly impact the income required to maintain a comfortable standard of living in different regions.
Understanding these cost-of-living variations is pivotal for individuals when considering relocation, career opportunities, or even just evaluating their financial health within their current locale. It's essential to integrate such data into personal financial planning strategies to ensure one's economic stability and comfort within their chosen city.
While California ranks third-most expensive for a single adult to live comfortably at $113,652, it only ranks fifth-most expensive for two working adults raising two children. The total family income should be at least $276,724 in the latter case.
What is the average yearly cost of living in California? According to 2021 research from the Bureau of Economic Analysis, California's average cost of living is $53,082 annually (rising above $ 70,000 for heavily populated areas like Los Angeles).
If we look at an adult with one child, the MIT living wage calculator is about $45 an hour, so even this $20 per hour is far below what MIT suggests for a living wage," Leigh said. MIT's living wage calculator considers expenses for a living wage to cover basic needs, such as food, health care and housing.
With careful budgeting and financial planning, $25 is still a viable hourly wage. Even though it's not a particularly high hourly rate, it's still well above the minimum wage rate in most areas. Keep in mind that your take-home pay will also be affected by things like benefits, overtime pay, and possible bonuses.
As a rule of thumb, a good salary in Los Angeles is between $100k and $200k gross per year. Based on the cost of living in Los Angeles, this should come down to a minimum of $76,710 yearly after taxes.
Tulare is cheapest city to live in California with close proximity to Fresno. The cost of living in this city is 0.4% lower than the national average. Housing is also very affordable at rent averaging $1,850. Apart from this, Transportation costs is 6.1% lower than the national average.
The number is down from 2023, where it cited a salary of $145,365 to be happy living in California. California's unemployment rate of 4.7% trails only Nevada in the study. Which states require a higher salary than California in order to be happy? Only Massachusetts and Hawaii.
An individual needs $96,500, on average, to live comfortably in a major U.S. city. That figure is even higher for families, who need to earn an average combined income of about $235,000 to support two adults and two children.
How rich is rich in California? As of 2022, the top 5% of earners in the state made $613,602 a year on average, according to a recent analysis from personal finance site GoBankingRates. That's roughly a 37% increase from 2017, when top earners raked in an average annual income of $447,207.
SmartAsset says a single working adult must earn at least $114,000, or about $55 an hour, to support themselves in the Golden State. When it comes to a basic “living wage,” MIT says a single adult in California needs to earn $27.32 per hour or $56,800 per year.
A good salary for a single person in California varies widely depending on location and industry: $50K may be enough in some areas, $100K in others. Here, we'll provide real-world stats to show you what the cost of living is really like.
The number is down from 2023, where it cited a salary of $145,365 to be happy living in California. California's unemployment rate of 4.7% trails only Nevada in the study. Which states require a higher salary than California in order to be happy? Only Massachusetts and Hawaii.
Address: 359 Kelvin Stream, Lake Eldonview, MT 33517-1242
Phone: +577037762465
Job: Product Hospitality Supervisor
Hobby: Gardening, Web surfing, Video gaming, Amateur radio, Flag Football, Reading, Table tennis
Introduction: My name is Manual Maggio, I am a thankful, tender, adventurous, delightful, fantastic, proud, graceful person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
