Here’s the Living Wage a Family of Four Will Need to Live in California
Written by
Dawn Allcot
Edited by
Maria Concepcion
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Ten of the 20 most expensive cities to live in are in California, according to a new analysis completed by personal finance website SmartAsset. The study looked at data from MIT’s Living Wage calculator to determine the income needed for a family of four to live comfortably in major U.S. cities.
“Living comfortably” encompasses a 50/30/20 budget, where 50% of your income pays for housing, utilities and other necessities, 30% covers discretionary spending, and 20% goes toward savings and investments.
San Francisco topped the list, with $339,123 needed for a family of four.
Here are the other nine California cities with high costs of living:
- San Jose: $334,547
- Oakland: $316,243
- Irvine: $291,450
- Santa Ana: $291,450
- San Diego: $289,453
- Chula Vista: $289,453
- Long Beach: $280,218
- Los Angeles: $276,557
Cost of Living Across California
Another study published by the Missouri Economic Research and Information Center placed California second on the list of most expensive states to live, behind Hawaii, based on figures from the first quarter of 2024.
GOBankingRates conducted a similar analysis, revealing that California is the third most expensive state for a family of four to live comfortably. In August 2023, our data showed that living comfortably in California costs $130,239 for a family of four.
This figure indicates that there are much cheaper cities than San Francisco, or even Los Angeles, in the state.
Explore More: I’m a Financial Advisor: Here’s Why My Rich Clients Identify With the Middle Class
Why Does California Cost So Much?
The GOBankingRates study evaluated the cost of housing, utilities, food and groceries, healthcare, and transportation, annually, across 50 states. Housing in California costs $33,969 annually, or $2,830 per month, putting it second behind Massachusetts regarding housing costs.
Food and groceries in California cost $8,820 per year for a family of four. At more than $10,000 per year, Alaska is more expensive to feed a family of four. Hawaii is also pricier. Since these states are far removed from the mainland U.S., shipping costs more, which drives up food prices.
California utilities cost $6,973 per year, putting it behind Alaska, Hawaii, and Massachusetts. Healthcare in California sets a family of four back $3,907 per year, which is less than Alaska, Connecticut, Hawaii, Washington, Wisconsin, and several other states.
Finally, transportation costs in California cost $11,451 annually, which is second only to Massachusetts.
This analysis doesn’t factor in property taxes and state income tax, which makes California even more expensive.
It’s impossible to ignore housing prices as a key driver of the cost of living in California. The median home price in Santa Clara County is more than $1.5 million, according to an article published by USAToday.com. The median housing price in San Francisco, deemed the most expensive city to live, is more than $1.3 million.
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