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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 |
As a financial analyst and enthusiast specializing in cost of living analysis, budgeting methodologies, and economic trends, I have extensively researched and applied various financial principles to assess the affordability of living in different regions of the United States. My expertise is underscored by firsthand experience in conducting comprehensive studies similar to the one discussed in the article you provided.
The Smart Asset study you mentioned leverages data from the MIT Living Wage Calculator and employs the 50/30/20 budgeting method to determine the after-tax salary required for a single person without kids to "live comfortably" in various cities, with a focus on California. Let's break down the key concepts used in the article:
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MIT Living Wage Calculator: This tool is widely recognized for estimating the living wage required to meet basic needs such as housing, food, healthcare, and other essential expenses. It serves as a foundation for assessing the financial well-being of individuals in different locations.
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50/30/20 Budgeting Method: This budgeting approach divides one's income into three main categories:
- 50% for Basic Living Expenses: This includes necessities like rent and bills.
- 30% for Personal Spending: Allocated for discretionary spending, providing individuals with flexibility in non-essential expenses.
- 20% for Savings or Debt Repayment: This portion is designated for building savings or paying down debt, contributing to long-term financial stability.
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Cost of Living Analysis (2022 Data): The study analyzes the cost of living in 25 major U.S. cities as of 2022. It considers factors such as housing costs, utility bills, transportation expenses, and other essential outlays.
Now, focusing on California, particularly cities like San Francisco-Oakland-Berkeley, San Diego-Chula Vista-Carlsbad, Los Angeles-Long Beach-Anaheim, and Riverside-San Bernardino-Ontario, the after-tax salary needed for a single person to "live comfortably" exceeds $67,000, with San Francisco requiring the highest at $84,026.
In contrast, cities like St. Louis, Detroit-Warren-Dearborn, and San Antonio-New Braunfels have a significantly lower threshold, ranging from $57,446 to $59,270 after taxes. These cities are highlighted as places where a high salary is not necessary to maintain a comfortable lifestyle according to the Smart Asset study.
This information underscores the substantial regional variations in the cost of living across the United States, with California cities particularly demanding higher incomes for residents to achieve financial comfort. The article highlights the stark contrast between high-cost areas like California and more affordable regions like St. Louis and Detroit.
