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How the hell can I afford to live in California?
Pinch-a-Loaf
Registered User regular
Registered User regular
Getting married next month. Fiancee and I found a beautiful apartment in Irvine, CA that we absolutely love. We would very much like to move there from Scottsdale, AZ in April. I've been given the green light by my company to move anywhere in the US and work from home. The problem is, we chose California and now my company's VP/CFO is telling me about all these crazy costs of living there that basically make it entirely unaffordable for us.
#1) Rent: It's much higher. We know that. We found a place that we would be able to afford, if not for...
#2) Health Insurance: Living in AZ, or most other states, it would cost me $100/month to cover my wife and I through my company's plan. VP/CFO is telling me that if I move to Irvine it will cost me $700/month for similar coverage.
#3) Income Tax: VP/CFO is telling me that, not only is income tax higher there, there are additional income taxes taken by the city/county/whatever that are not taken in AZ.
Basically I am super frustrated right now because we spent months finding where we want to live, and now that we have found it we're being told that we can't. We already understood that rent would cost more, gas would cost more, all that...but the addition of #2 and #3 pretty much blow our budget away.
Is my VP/CFO correct about these things? Has anyone moved from AZ to CA in the past few years that could offer me some insight about these surprise (to me, anyway) costs of living there? What did your paycheck look like the month after you moved vs the month before you moved? VP/CFO seems to be being a real butthead about this issue, and I can't put my finger on why. Like maybe he just doesn't want another employing moving out of state and telecommuting (even though he telecommutes from another state himself). So in a way it feels like he might possibly be exaggerating things to accomplish some hidden agenda.
#1) Rent: It's much higher. We know that. We found a place that we would be able to afford, if not for...
#2) Health Insurance: Living in AZ, or most other states, it would cost me $100/month to cover my wife and I through my company's plan. VP/CFO is telling me that if I move to Irvine it will cost me $700/month for similar coverage.
#3) Income Tax: VP/CFO is telling me that, not only is income tax higher there, there are additional income taxes taken by the city/county/whatever that are not taken in AZ.
Basically I am super frustrated right now because we spent months finding where we want to live, and now that we have found it we're being told that we can't. We already understood that rent would cost more, gas would cost more, all that...but the addition of #2 and #3 pretty much blow our budget away.
Is my VP/CFO correct about these things? Has anyone moved from AZ to CA in the past few years that could offer me some insight about these surprise (to me, anyway) costs of living there? What did your paycheck look like the month after you moved vs the month before you moved? VP/CFO seems to be being a real butthead about this issue, and I can't put my finger on why. Like maybe he just doesn't want another employing moving out of state and telecommuting (even though he telecommutes from another state himself). So in a way it feels like he might possibly be exaggerating things to accomplish some hidden agenda.
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I've certainly never paid local income taxes... state taxes are higher than some other places, but we're talking about $1k/year on a $30k/year income, so not thousands
Property taxes are high-ish, but if you're renting that's not a concern
As far as I know, there's no reason health insurance should cost that much more in CA... it's possible that your company has a much shittier deal with a CA provider, but that seems absurdly high for health insurance
That insurance increase sounds absolutely absurd. I would definitely talk to your benefits person about that and see what it would actually cost.
Are you getting any sort of raise in the move? California employers generally pay more than other places because the cost of living is higher. Not enough more to totally offset the cost of living increase, but enough to help. If you're making an Arizona wage and paying California cost of living, your budget might get tight.
It seems like you're planning to do the opposite, which is just not a good idea.
Yeah dude, you are doing it wrong. If you have to move, look for a new job post haste.
If you can stall it, don't "decide" to live in CA, until you have a job that pays CA wages.
EDIT: Anecdote about the COL discrepancy. I have a buddy in Wichitah, KA that told me he made $50,000 and my gut reaction as a NYC guy was "How the fuck do you live??"
So yeah, I would definitely recommend living someplace cheap if your salary doesn't make a difference. CA is not where you want to be.
Quoted for agreement and lime!
Also, newlyweds. There will be plenty of opportunities for friction, and finances are the most common one. Don't stress your brand new marriage unnecessarily.
#3, CA's top income tax bracket for this year is 9.55% (full breakdown here), and Irvine has a 8.75% sales tax.
Couple of other things to consider: it isn't just income tax rate, sales tax and rent that is more expensive in CA. Everything is going to be more expensive in CA with the possible exception of produce (since we grow it all).
Additionally, CA is in a terrible financial state at the moment and is likely to either cut benefits or increase taxes, fees etc in the near future.
What is it about Irvine that makes you want to move there?
It's still going up at a substantial rate vs. the rest of the nation. If you can "just get by" now. You wont be able to in a year, you'll be falling behind.
Also consider your future salary growth, does your company factor cost of living adjustments into wage changes?
As someone who moved out of California three years ago: my advice is not to move to California. That being said, the local income taxes usually top out at 1-2%, and if that's going to kill your ability to live there, you don't really make enough to be able to live there, anyway; you should have a much larger cushion than that.
What attracted you to Irvine? Maybe we can give you some recommendations for other places (which are more affordable) you can be looking at.
Edit: I should point out that I was born and raised in California, moved out to go to college on the East Coast, then moved back for a couple of years, then moved to Seattle. So, it's not like I moved there, and then left in six months or something.
As someone who was born and raised in California: my advice is the exact same.
The cost of moving TO California is insane. When I moved away, I took around a 40% pay cut, and am still coming out better off. Unless you have an in-demand type of job, the major (coastal) cities in California are probably out.
Yeah you could move to Chico or Red Bluff or Redding (I'm from Chico actually), but then what's the point? I love it because it's home, but I'd rather live in Oakland or Walnut Creek or something.
I'd cut my dick off to make that much right now (ok, not really, but close).
Maybe try a different area of Cali? It's kind of a big state and the cost of living can vary quite a bit. I'm looking at a Forest Service position in Weaverville, CA where the median income is about 30k. Maybe expand your search to a smaller town farther from LA?
As far as Health insurance goes I don't have much of a point of reference as I've never lived outside CA, but for a barebones plan I pay almost $100 for just myself
I've pretty much always played it safe and saved my money. But there are all kinds of people living in desirable coastal California cities. I (only?) make $55,000/year but I'm sure many of those people manage to get by on less. I've got some money in savings as a safety net and I'm very tempted to accept the risk and go for it. My fiancee will hopefully find a job there semi-quickly and maybe her California-based employer will offer us better California-based benefits such as health insurance.
Why Irvine? As I think someone said, we don't really want to move to California just to live an hour or so away from the coast. That would really diminish the point for me. We did quite a bit of looking up and down the coast in San Diego and Orange Counties and this complex we found in Irvine stands head and shoulders above all the rest we've seen. We were disappointed by place after place and just not very excited until we found this one. It's in the same price range as many of those that we were not excited about too.
What gives me the greatest pause is what Frem said:
That one we are going to have to be very careful with. I certainly don't want that. I also don't want to feel the regret and "what if" from Reservation Road. This week I've been bombarded by people at work convincing me that we can't or shouldn't move there, but my fiancee keeps reminding me of the perspective that says "why the heck not?" I think we're gonna do it. It's not the craziest thing anybody ever did. Playing it safe does not always necessarily turn out to be the best decision. We have the budget to pay the expensive rent and gas and all that. And a 1-2% income tax isn't going to kill us. It's really just this health insurance thing, which I guess we're going to have to make work one way or the other.
Is there anybody here that has had to temporarily go without health insurance because you couldn't afford it? Got any info or advice about how that has worked out when health issues come up?
55K no major expenses + a second income on the way you will be fine. It will be a lower quality of life then else ware but there are a bunch of positives to California . Just keep your monthly stuff done to a reasonable level.
It's a very very risky move to intentionally go without health-care. Odds are you can get by without incident, but if you do run into an unexpected illness or injury, you can kiss your life-savings good-bye. Anecdotal, but I had a girlfriend who got a job shortly after graduating college. Her college insurance coverage lapsed, and in the 3 month or so period between that and her new job's health insurance kicking in, she came down with a life-threatening illness. She was in the hospital for around a month and the bill just from the hospital (not including dozens of doctor fees that were billed separately) came to over $100,000. She was eventually able to negotiate it down to around $20,000.
If extending coverage to your fiancee through your work insurance is too expensive, have her at least get a policy with good maximum coverage but a very high deductible. That way if anything catastrophic happens, you two will only be out a couple thousand of dollars instead of everything.
P.S. If she had any money in savings or assets, she probably wouldn't have been able to bargain down as much.
I love living here and if you think you would too I'd definitely consider at least trying it!
The healthcare sounds strange to me. I have the more expensive healthcare option at work and handle the benefits so I know exactly how much it costs the company... and even if I were to pay 100% that'd still only be $450 a month for both me and my husband (we are in our 20s - presuming you are too; costs do admittedly get ridiculously high the older you are). I don't see why, if the healthcare coverage your company has extends nationwide, why the costs should be so much higher in California as opposed to other states. Is there someone other than the VP/CFO you can ask about it?
I'd not recommend going without coverage... although having said that we were without coverage for a year. I was constantly paranoid, however! I've known people become bankrupt through a necessary emergency medical procedure - we were very, very lucky not to have anything happen to us during that time.
The VP/CFO is our benefits person, but like I said he seems to have some hidden agenda because he's been uncharacteristically short with me about the whole situation. He seems to want to scare me off the idea and leave it alone. On day 1 he threw some loose figures at me and I ended up asking for more information/details to base my decision on. Today (day 3) he said he didn't run through every possible plan to see what they would cost, but somehow came up with the numbers of $300/month for just me or $700/month for my wife and I. He also made sure to bring up (and apparently exaggerate) other costs such as the extra income tax. I'm not sure what to think about why he's acting this way because we have employees in several other states including Mississippi, Virginia, and Hawaii. One of my co-workers moved from Arizona to San Francisco last year and she says he made an equally big deal about it at the time. She ended up having to pretend to still live in Arizona so her benefits package wouldn't change. Now she and her kids can do dental/eye doctor/emergency visits in California, but have to schedule regular doctor visits for when they are in Arizona.
I don't feel that I can 100% trust the numbers he's giving me, but I don't know any way around him. On day 1 I called our company's health insurance provider, who referred me to our HR management company, who in turn referred me to my VP/CFO...so no help there. I may just have to buck up and tell him "Look, I'm trying to make a life-changing decision and I need you to work with me to get some necessary information even if it becomes a little tiresome for you."
― Dr. Seuss, Oh, the Places You'll Go!
I miss a lot of things about California. One of them is not PG&E.
Do you like paying 250$/month in energy bills because you don't want it to be 94 degrees in your 1 bedroom apartment? I hope you do.
edit: This is not hyperbole for the sake of making a point, I think the highest energy bill I had living in Concord, CA was 329$ for a 2 bedroom.
This so hard. I might have a different opinion if you were buying a house somewhere, but if you will just be in an apartment, this is probably the best advice I can think of.
You're banking on the ability of your wife to get a job to assist with bills, and being able to find a cheaper health insurance option (assuming the numbers given to you are accurate) in order to make everything line up financially. With the job market being down, the costs of living in california, and the (apparent) emnity that your company superiors are throwing your way, it doesn't sound like a prudent choice. I mean, if you move out to California and the CFO doesnt really like that, you become a little bit higher on the stack of people he'd recommend getting rid of, especially if you cost the company more than some other person in a similar position elsewhere.
It sounds like you are newly married and young; there will always be time to live next to the coast later in life when you are much more secure financially. When you use the phrase "how bad would it be without health insurance" to justify trying to move somewhere, that doesn't sound like a warning bell?
Regardless, I would recommend against it too. If there were other draws like family or she had something great waiting, then maybe, but I'd forget it with being newlyweds and save for a house.
http://swz.salary.com/costoflivingwizard/layoutscripts/coll_start.aspx
I plugged in an income of $100,000 in the Phoenix metro area and the calculation told me that you'd have to make about $123,000 in the Orange County area just to break even in terms of standard of living.
So, unless you are looking at a sizeable raise for moving to California, you're going to find yourself less well-off financially if you move.
Edit: People typically move out of California into places like Arizona and Utah, not the other way around. There are many good reasons for that. California has been shedding middle-class+ residents for years now.
Rigorous Scholarship
Do not do it, you will regret it. With the freedom to move anywhere in the country and make the same salary, you should be taking advantage of that by moving somewhere with a low cost of living. There are tons of nice areas with great weather and great culture without California style government and costs.
If I was in that situation I would ditch NJ in a heartbeat, and NJ doesn't even come close to CA's cost of living.
No, it's certainly not, but the income tax is insanely low, especially compared to California. Although that might also explain why AZ is such an absolute shithole.
The harder the rain, honey, the sweeter the sun.
I certainly have, but only for COBRA coverage. Which is not intended to be a long-term situation, but with unemployment being what it is, it's suddenly a special new hell many Americans are discovering.
Yeah this is why I didn't bother with COBRA during my current unemployment. I wasn't paying hundreds of dollars a month for a shitty ass plan that barely covered anything. I'd like to be able to you know, eat, while I try to get another job.
The harder the rain, honey, the sweeter the sun.
It depends on how much the company pays and how much is passed on to the employee. Single employee coverage at my company costs $440/month (and the company pays 75%). Employee + spouse coverage runs $651....so $700 a month is a feasible figure.
I only ask because you're moving to Orange County, and while people in Irvine itself probably won't give a shit, the rest of the county isn't quite so open-minded.
Pro-tip: I've been advised that failing to maintain COBRA (or otherwise allowing your coverage to lapse) between jobs can render any chronic, but previously covered, ailments you have as 'pre-existing conditions' when you eventually get new coverage. Ex: Diabetes, Thyroid stuff, etc.
It is a wonderful system.
Yes...although one employee is not going to raise the taxes by a tremendous amount, not on a salary that low.
There is certainly a lot to consider. Some of the previous posters have raised good points.
It's all about how keen you are on California, what your lifestyle is currently like in Arizona, and how much you are willing to sacrifice.
I still love living here, despite the (very valid) problems being raised. I always want to live within a short(ish) distance of the sea, I definitely plan to live in a big city for at least the time being (I come from a town of 120,000 people which is too small for my tastes, despite it seeming huge to others) and I love how sunny and warm California is - I am definitely a warm weather person. So I certainly understand the draw of living here.
For me the transition to California was easy, because I'm from the UK where the weather is terrible, the cost of living is almost as high, taxes are far higher, and apartments and houses are even smaller and shittier. I wasn't giving up a large apartment or big house to come and live here, and my utility bills for air conditioning are lower than they were in the UK for heating.
How set are you on this apartment you have in mind? Have you seen it in person? I ask because one reason we're able to live fairly well here on my salary is because the apartment is relatively cheap for the size, and one reason for that is because it has a 1 star rating on Yahoo. When our friends were looking for apartments, my apartment complex was at the absolute bottom of the list. After trawling through 18-20 others, they visited this one, and discovered that in the year following the really bad online reviews, the management changed, a friendlier receptionist was hired and the apartments were renovated, meaning none of the complaints about rude management, thin walls and being stiffed on rent deposits held up. Meanwhile, many of the apartments that had good reviews were far smaller or uglier in person.
Have you considered anywhere else in California? I'm in the Bay Area, which I feel is slightly more affordable. It's also cooler here that air conditioning isn't as necessary, so bills are lower (average pg&e bill is less than $100 a month... but then we're out of the apartment during the day, whereas you'll be telecommuting from home, so that's another thing to consider).
The cost of COBRA is the actual 100% cost of the employer sponsored plan without the employer kicking in anything for it. Health insurance is pretty fucking expensive. A lot of people don't realize this because they only look at the portion that is taken out of their paycheck.
For the health insurance, your company guy could have been saying in a roundabout way "If you move out of state, we aren't going to set up an employer sponsored plan in California just for you. You will have to get your own insurance"
The good AND bad news about the individual market in california is that it allows for medical underwriting for individual plans. If you and your wife are healthy, insurance will be cheap. The downside of this is that if you ever decide to get sick or become undesirable, your carrier will face rape you every year at renewal with the maximum increase until you go the fuck away (Im not sure if CA caps the renewal max increase).
Food for thought, OP