How Does a California Family Survive?

It’s common enough to discuss the high cost-of-living in California. It’s become a serious topic, at last. But for Californians who are used to paying ridiculous prices for everything, it may be helpful to present a comparison in the form of an annual family budget. How much does it cost to take care of a family of four in Los Angeles compared to Houston?

Photo courtesy of channone, flickr

The choice of Los Angeles is logical enough. One in four Californians live there. And while Los Angeles County may be more expensive than most of California’s inland counties, it is not cheaper than Orange, San Diego, or any of the nine counties of the San Francisco Bay Area. Altogether there are over 25 million Californians living in expensive coastal counties. Two out of three Californians endure the types of prices depicted here.

The choice of Houston is also logical, not simply as a representative of cheaper Texas, but as a proxy for nearly all of the United States, with the only exceptions being those high-tax (usually coastal) metropolitan areas located in states ran by progressive Democrats. In terms of the cost-of-living, Houston is an authentic stand in for most of America.

Reviewing the budget depicted below, the first thing to realize is that most people don’t have a household income of $100,000 per year. The median household income in California is $71,805. That means half of those 25 million people who have to live in places like Los Angeles have a household income that is less than $71,805. Let’s see how much it costs to a family of four to live in such a place.

As can be seen, while Texas has no state taxes, the Californian gets a bigger federal deduction because of their much bigger home mortgage payments. Very roughly speaking, these factors cancel out. But where there’s a big deduction, there’s a big payment. The median price of a home in Los Angeles is a larcenous $617,000, whereas the same home in Houston will only set a family back by $189,000. Based on a 4 percent, 30 year fixed mortgage, this translates into a crippling $2,900 monthly payment in Los Angeles, vs. a manageable $915 mortgage payment in Houston.

Making house payments that low used to be normal in California. They still are in those parts of this nation, Houston included, where the progressive Democrats haven’t yet taken control. Or if the progressive Democrats have taken control – Houston, after all, is now a battleground county – they haven’t yet had enough time to ruin everything. Consider the difference: For a household with an income of $100,000 per year, in Los Angeles, the mortgage costs 36 percent of before-tax earnings. In Houston, only 11 percent.

California and Texas do not have significant differences in costs for family health insurance, but everywhere else, California costs more. Even property taxes, where Texas charges a higher rate, are nonetheless a much more significant burden to the average Californian, because the assessed value is so much higher.

Comparing the other necessities exposes additional evidence of just how difficult it is to survive in California. Electricity costs, $.20 per kWh in California vs. $.11 in Texas. Natural gas, $13.60 per thousand cubic feet in California vs. $8.25 in Texas. Gasoline? $3.75/gallon vs. $2.35. Even food is cheaper in Texas than it is in California, the supposed breadbasket of America. The food price index – as compared to the national average – is 100.4 in Los Angeles, 92.9 in Houston.

Altogether, the average family of four in Los Angeles spends nearly $300 per month more on gasoline, utilities and food than they would in Houston. They spend over $2,000 per month more to keep a roof over their heads. They roughly break even on health insurance and taxes.

Imagine two hard working parents who manage to bring in $100K per year. In Los Angeles, they’ll have about $1,000 per month left, after paying for taxes and the bare necessities. They’ll need this money to pay for telephone, internet, and cable services, garbage collection and life insurance, buy and replace clothes, furniture, and appliances, make car payments, purchase car insurance, maintain their vehicles and their home, save for college tuition and their own retirements, cover medical co-pays and deductibles, and maybe dine out from time to time and take an occasional vacation. It’s not enough.

Let that sink in. A family of four can barely survive in California on a household income of $100,000 per year. One unexpected financial shock, and they are underwater.

In Houston, by contrast, this same family will still have over $3,500 per month left over after paying for taxes and the bare necessities. This is enough money to make additional purchases and payments and still have some left over for savings. A family making $100,000 per year cannot afford to live in Los Angeles, yet they can live reasonably well in Houston – or pretty much anywhere except in California and other deep blue enclaves across the land.

And what about those families that don’t make $100,000? What about households earning at the median California income of around $72,000 per year? What about single parent households, with a working mom trying to keep a roof over her family, perhaps renting a home in Los Angeles, where the average rental home costs $2,371 per month vs. $1,092 per month in Houston?

What bravery it must require to be a Californian in 2019, trying to raise a family. Trying to make ends meet. How did it come to this?

This article originally appeared on the website California Globe.

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  1. How does a California family survive? This one is easy to answer. First you start with a lotta’ money.

  2. We can all thank a Progressive Democrat and their suffocating policies for the cost of living in California.
    While they dig the grave, we wait for the passing and the burial of a once great state.
    In the mean time, count on Progressive Democrats to continue having their hand in your pocket.

  3. The economics of living in california drastically changed last year. With the standard deduction for a married couple at $24,000, a lot of families no longer itemize. That means the family that bought a house no longer has a tax incentive. I expect this to change the economics of homeownership in California in the coming years.

  4. The biggest COL factor for middle class folks is housing. It can vary dramatically within a state (and usually does), but a state’s median home price is a good indicator. Texas is low, but 27 states are lower.
    The most expensive and affordable states to buy a house, ranked (

    To compare state’s COL, I use the “Missouri” COL index. I think it makes a more realistic comparison than the BLS figures. Using this index, Texas is low, but 17 states are lower.
    Cost of Living Annual Average 2018 (

    Looking at this index, it’s clear that the “red” states are cheaper to live in than the “blue” states — by a LOT. For instance, for the first quarter of 2019, California’s COL is an astonishing 65.8% higher than Texas.
    Finally, you have to factor in your earning power in each state (assuming you are still working). Generally you’ll make more in blue states, but not enough to offset the higher COL.

    For instance, looking at 2017 “median household income,” California is higher than Texas — $71,085 vs. $57,206. CA averages 25.5% higher income.
    List of U.S. states and territories by income – Wikipedia (

    But after factoring in the respective state’s COL (including taxes), you’ll live significantly better economically in Texas. Remember, CA’s COL is 65.8% higher than Texas.

    My favorite state? Tennessee — especially eastern Tennessee — from Nashville to Knoxville. Low taxes, booming economy, and not likely to “flip blue” anytime soon — unlike Texas.

  5. Amber Torres says

    We live in our cars, with our parents at the age of 30, with multiple roommates, or with a boyfriend that we should have left ages ago but don’t know where else to live, so we figure just stay until maybe things get better for the sake of having a roof over our head?
    These are the truths about every millennial and I have NO idea where the law of averages comes up with someone making 71,000 a year. Most people around the Bay Area make 50,000 or less and have one or two kids AND pay child support which takes up 40 percent of your check. This is the whole truth and nothing but the truth, so help us God.

    • We need to boat in some real American people in office. Like the working man or woman. Not these rich stuck up in a visuals we have in office now

    • Edward Ring says

      Amber: You’re right, but remember that when the median income is $71,000, that means HALF of all households make less than that. And as household income, it counts the earnings of everyone living under the same roof, usually two and often more than two earners. Another analysis is worth doing that shows how much of a strain California’s cost-of-living puts on people who, as you say, make $50,000 or less.

  6. We need to boat in some real American people in office. Like the working man or woman. Not these rich stuck up in a visuals we have in office now

  7. Elizabeth 90004 says

    I had much more money after taxes BEFORE trump got into office. The republican officials take from the poor and give to the rich. I don’t know how this author thought they could link california’s housing cost to politics! It has nothing to do with that. It’s expensive to buy a house in cali because everyone wants to live here. Location is everything. You think people are beating a path to get into hell? Nope. Just heaven.

    • Richard Rider says

      Elizabeth, your one person sample survey is pathetic. The objective results are in. 80% pay less taxes under the Trump tax law. 15% pay about the same, depending on circumstances. 5% pay more. But let’s not let facts deter you from making silly, patently false generalizations.

  8. Hi, why are you criticizing the very people and system you support as a ? journalist. Oh, wait, you are just covering a sad story…

  9. Sharon Lawn says

    Our adult children now are unable to move out like we were once able to. When I was 20 and had a 2yo son I was able to move out on my own and support us both on $7.50 an hour and pay my rent of $500 for a nice apartment minutes from the beach in Newport Beach. Now my 27yo son can’t afford to move out and he makes $65,000 a year. We made our then 21yo daughter move out bc she was not respecting our rules but she lost job after job and we are now stuck paying her portion of rent which is $1,250 a month plus all her living costs. I can’t make someone hire her and her resume as well as her credit report is awful. Her lease is up soon and we will not co-sign for her again. Not sure what her options will be. We won’t let her live on the streets but cannot afford to keep supporting her. Rent is outrageous now for any young individual trying to make it on their ow. I have nieces and nephews still living with their parents and are in their mid-twenties or even thirties who live in mom and dad rental properties. Our kids are set up for failure right from the get go with the outrageous rent costs. Their rentals fees are higher than our mortgage is. And my oldest son has no health benefits at all. He works for himself.

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