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California Living Expenses: What the Average Resident Expects To Pay

Are you considering moving to California? There are plenty of reasons to visit the Golden State, but to live there full-time, you must know what to expect regarding your living expenses. Is California too expensive to be your full-time home?

Not if you know what to expect! Read on to get a breakdown of the most common California living expenses so that you can plan.

Housing Costs

The average California resident expects to pay quite a bit for housing costs. As one of the most desirable locations in the US, rents in California are higher than in other states, and the houses are not cheap. Usually, around the state, the average rent is just over $2,000 per month, and the average price of a home is around $500,000.

That said, the overall cost of living in California is higher than the national average due in part to the high cost of housing. Keep in mind, however, that the cost of living varies significantly from city to city in California, so some may be cheaper than others.

Transportation Expenses

If you live in an urban area, you may benefit from using public transportation services, and you can find pass cards to save money on your monthly transit costs. Those driving their vehicle must pay for gas, car repairs, and general maintenance.

Those who live in the countryside or near mountain roads may have to factor in the costs of bridge tolls or parking fees. In any case, transportation costs in California will depend on location and available services.

Depending on where you live, you may need to pay for the following:

Car Insurance

Car insurance is no exception. Many factors influence rates, such as personal driving history, age, and credit score. Insurance premiums for younger drivers tend to be higher due to a lack of experience in the eyes of the insurance company.


Gas prices can also vary significantly from day to day and even hour to hour, making it essential for drivers to be aware of the price fluctuations. Additionally, California has one of the highest gas taxes in the nation, meaning the average resident uses a more significant portion of their income to cover the gasoline costs.

Car Repairs

Maintaining a car in California can be expensive, as the cost of labor is higher than the cost of parts. Additionally, operating a vehicle in California often includes the cost of emissions testing and related fees. In addition to regular maintenance, drivers should expect higher insurance premiums due to frequent accidents and more expensive parts and labor.

Utility & Service Costs

Publicly owned utility companies usually provide these services. Moreover, telecom services such as cable and internet are recurring expenses homeowners can expect to pay. Trash removal also comes at a cost, although municipalities usually provide it at a flat rate for residents.

Homeowners may also pay additional fees for services like:

  • pest control
  • landscaping
  • window cleaning
  • pet care

Financing and Taxation

California also has high insurance premiums, and the cost of housing is well above the national average. Financing and taxation can be significant issues for California residents, as they have to pay more than the national average regarding income taxes.

Property taxes are also higher in California, as the state places a 1.25% tax on the total cash value of the property and houses. California also has a high sales and use tax average of 8.41%.

Lastly, homeowners in the state have to pay the highest mortgage rates in the nation. Financing and taxation can be a significant issue for California residents, as the increased costs can cause a financial strain.

Hidden Expenses

There can also be a range of hidden expenses that can add to California’s overall living costs. These hidden expenses include car registration and insurance, healthcare, repairs, maintenance, pet care, taxes, and childcare. Additionally, living in some parts of California can be more expensive than in other places, such as major cities, due to the high cost of living there.

Modifying a home for special needs, creating a new home office, and purchasing the latest gadgets may add to hidden expenses. Researching and budgeting for the hidden costs can ensure Californians are well-prepared to handle all their living expenses.

Energy Expenses

California living expenses can be quite high, and energy bills can be among the most expensive. The average residence in California can expect to pay around 25-30% more for his or her energy bill than the national average.

Electric rates in California tend to be more expensive due to investments in cleaner energy resources and an aging energy infrastructure. On average, residents should expect to pay about 18.51 cents per kWh for electricity. Additionally, natural gas prices in the state tend to be higher than the national average.

California’s high living expenses, combined with its mild to warm weather, make energy efficiency a key requirement for cutting down on monthly energy bills. Investing in energy-efficient appliances, windows, and insulation can help reduce energy bills. Establishing energy-efficient daily practices can also help to save on energy costs, such as turning off appliances when not in use and utilizing natural lighting instead of electric lighting.

Investing in Solar

The high cost of living in California is a reality for most residents. Many are turning to renewable energy sources, such as solar panels, to combat the excessive power and energy prices. Solar panels offer a great way to reduce electricity bills while helping the environment.

With many companies now offering solar panel installation services, it’s becoming easier to reduce living expenses by utilizing the sun’s natural power. The average cost of solar panels in California depends on the size and type of system. Once all the upfront costs are paid, the monthly bills will be drastically lower, saving the average consumer hundreds of dollars each month.

Furthermore, solar organizations and government initiatives are making the installation process even more accessible by helping to cover part of the costs.

Understanding the California Living Expenses

California living expenses can be steep, with rent and other housing costs usually at the top. It’s essential to do your research to find the right balance between price and amenities. Many California residents opt for a side hustle to make ends meet and stay within budget.

Don’t let the sticker shock of living in California deter you; with some know-how and creativity, living in the Golden State can be well worth it.

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