Despite California’s reputation as a high-cost haven, a recent study unveils a surprising twist: raising a family in the Golden State might not be as outrageous as you’d expect.
The 50/30/20 Rule of Life
The study, conducted by financial tech whizz SmartAsset, delved into the cost of living across the country. They employed the 50/30/20 budget rule, an age-old money management philosophy. It suggests allocating 50% of your income to necessities (housing, healthcare, food), 30% to non-essentials (travel, shopping), and 20% to savings and bills.
California: Comfortable Living in the Fifth Spot
According to this rule, a two-parent household with two children needs an annual income of 6,723 to live comfortably in California. This places the state as the fifth most expensive for family living. So, while California may be far from budget-friendly, it’s worth noting that other states can be even more costly.
Singlehood in the Sunshine State
In contrast, California ranks third on the list of most expensive states for single adults. To live comfortably solo, they require a hefty annual income of at least 4,000.
A Glimpse into Basic Living Costs
MIT’s Living Wage Calculator sheds light on the basic expenses required to survive. In California, a single adult needs to earn a respectable .32 per hour or ,800 annually. For a family of four, that number jumps to 8,361 or .26 per hour for each parent.
A Los Angeles Special
Breaking it down by county, a family of four in Los Angeles County requires a combined annual income of 8,000 or .24 per hour for each adult. For a single individual, the Living Wage hovers around .63 per hour or ,300 annually.
State of Extremes
Topping the charts as the most expensive states for single adults are Massachusetts and Hawaii, while West Virginia and Arkansas take the crown as the least demanding on your wallet.
The Bottom Line
This data offers a comprehensive snapshot of the cost of living in California. While it may not be the cheapest destination, it’s not as unattainably expensive as you might believe. Particularly for families, California offers a reasonable alternative to the extreme costs found in some other states.
Words to Remember:
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Living Wage: The minimum wage required for basic necessities and a modest standard of living.
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Comfortable Living: A standard of living that includes both essential and non-essential expenses.
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50/30/20 Rule: A budgeting strategy designed to allocate income effectively.
Data sourced from: ktla.com
