Cost of Living in California

By Jacqueline DeMarco

(Last Updated – 07/2026)

Lots of people are California dreamin’, but the reality is that the most populous U.S. state is one of the most expensive.

While thinking of wealth, muse on health. If you’re committed to a healthy lifestyle, you’ll be in good company in California. U.S. News & World Report found that the Golden State has one of the healthiest populations in the country. All of those sunny days — about 146 of them a year — could be keeping everyone fit and happy.

If you’re tempted to move to this sprawling state, keep reading to learn what the California cost of living looks like. Don’t forget to pack your sunglasses.

What’s the Average Cost of Living in California?

Average Cost of Living in California: $67,565 per year

If you have California beaches on your mind, make sure you take a close look at your monthly budget.

California is the third most expensive state in the country, according to Missouri Economic Research & Information Center (MERIC) data. The only U.S. places that cost more are Hawaii and Massachusetts. So, what is the cost of living in California? According to 2024 data from the Bureau of Economic Analysis, the annual average cost of living in California is $67,565. Based on that number, it would cost $5,630 per month to live in California. Here is how that breaks down by major spending categories.

Housing Costs in California

Average Housing Costs in California: $1,654-$3,019 per month

You’re going to be hard pressed to rent or buy a place for less than $1,000 a month in California, despite the fact that the state has over 14.9 million housing units. Zillow put the median sale price of California homes at $775,550 in May 2026, compared with a U.S. median existing-home sale price of $370,320 in the same month.

Here’s what housing costs look like on a monthly basis, according to the latest data from the U.S. Census Bureau:

•  Median monthly mortgage cost: $2,946

•  Median studio rent: $1,654

•  Median one-bedroom rent: $1,835

•  Median two-bedroom rent: $2,179

•  Median three-bedroom rent: $2,431

•  Median four-bedroom rent: $2,854

•  Median five-bedroom (or more) rent: $3,019

•  Median gross rent: $2,104

Home prices can vary greatly throughout this state. These are the typical home prices in 20 major California cities, according to Zillow in May 2026.

Utility Costs in California

Average Utility Costs in California: $426 per month

Utilities can add up fast, especially when you add cable and satellite bills.

Groceries & Beverage Spending

Average Grocery & Beverage Costs in California: $400 per person, per month

You gotta eat. How much should you plan to spend on food in California?

The Bureau of Economic Analysis estimates that California’s average annual nonrestaurant food cost per person is $4,798. That equates to nearly $400 per person, per month. The average family of four could end up spending $1,599 per month on groceries.

Where you live in California can have an impact on food pricing. The Council for Community and Economic Research, which ranks the food costs in major American cities, shared the cost of groceries in California cities as of 2025, from lowest to highest.

Transportation

Average Transportation Costs in California: $9,528-$17,892 per year

From San Diego all the way up to Sacramento, California is notorious for its bad traffic, so prepare to spend a lot of time in the car. How much will all that commuting time cost you?

How many children you have and how many adults are in your family can all affect how much transportation will cost you in California. The following results from MIT’s Living Wage Calculator, with data from 2026, can give you a general idea of what to expect cost-wise.

Health Care

Average Health Care Costs in California: $11,054 per person, per year

According to the Bureau of Economic Analysis Personal Consumption Expenditures by State report, the average annual cost of health care per Californian is $11,054.

Of course, your specific health care needs and your coverage also play a large role in how much health care will cost you each year.

Child Care

Average Child Care Costs in California: $990-$1,785 or more per child, per month

It’s no secret that child care is one of the larger monthly expenses. In the state of California, what you can expect to spend depends on the age of your child and whether you choose to have home-based family care or not.

Good to know: As of the 2025-26 school year, the state has free universal pre-K for all three- and four-year-olds. These are the average child care costs you can expect in California, per current data from CostofChildCare.org.

Taxes

Highest Marginal Tax Rate in California: 13.3%

California residents are used to paying a hefty tax bill. State income taxes can go as high as 13.3% for those at the top of the graduated-rate income scale.

That is the highest state income tax rate in the country, as noted by the Tax Foundation’s State Individual Income Tax Rates and Brackets for 2026. Of course, most earners still need to pay federal income taxes.

If you’re looking for somewhere to live that doesn’t charge any state income tax, consider Florida, Tennessee, Texas, South Dakota, Wyoming, Nevada, New Hampshire, or Alaska.

Miscellaneous Costs

It’s obviously important to have an understanding of what the essentials (food, rent, utilities, etc.) will cost you, but people don’t just purchase essentials. What would the fun in that be?

The Bureau of Economic Analysis estimates that additional personal expenditures per Californian come out to $37,654 per year.

Take a closer look at what you might spend some of that money on (costs are as of June 2026):

•  Tickets for one day at Disneyland: $104 or more for adults, depending on day and ticket type

•  Annual family membership for the Monterey Bay Aquarium: $295

•  A day at the beach: Starting at $0 at beaches with free parking

•  A world-famous Pink’s Hot Dog in Los Angeles: $8.50 for one chili cheese dog with mustard and onions

Recommended: What Are the Average Monthly Expenses for One Person?

How Much Money Do You Need to Live Comfortably in California?

What it means to live comfortably is hard to nail down, and your definition will depend on your personal standards. Keeping that in mind, when it comes to living in California comfortably, U.S. News & World Report’s Affordability Rankings place the Golden State as the least-affordable state. Ouch.

It turns out that having beautiful weather almost every day of the year comes at a price. MERIC also lists California as one of the most expensive states to live in, so take a close look at your budget before moving to California and choose your housing accordingly.

What Major City Has the Lowest Cost of Living in California?

The Council for Community and Economic Research’s Cost-of-Living Index for 2025 can help you find the more affordable areas to live in California. Here are the three cities where cost of living is least likely to break the bank.

Modesto

Farmers markets, art galleries, and a range of festivals make Modesto an excellent choice for those hoping to make a California life with their wallets in mind. A cost of living index of 108.3 gives this city the honor of most affordable city in the state. In May 2026, the median home sale price was $445,833.

Bakersfield

With a cost-of-living index of 109.7, you’re likely to find relative affordability in Bakersfield. Nature lovers will appreciate having close proximity to whitewater rafting and the aquatic center, as well as the ability to join local hiking clubs. Zillow reported a median home sale price of $396,712 in May 2026.

Redding

Known as the trails capital of California, Redding is an outdoorsy person’s dream, with a sea of green, leafy trees in spring and summer (and beautiful fall colors in autumn). As the third most affordable city in California, Redding comes in just after Bakersfield with a score of 110.6. According to Zillow, the median sale price for a home in Redding is $392,359 as of May 2026.

Helpful Resources for Future California Residents

FAQ

What are the pros and cons of moving to California?

California is considered one of the healthiest states in the U.S., and it’s home to Disneyland and a host of public beaches. However, it’s also one of the most expensive states to live in, with even the cheapest city having a cost-of-living index of 108.3.

How much do I need to make to live in California?

According to the Bureau of Economic Analysis, the cost of living as of 2024 is $67,565 on average. If you want sufficient income plus some extra to build up your savings, using a 50/30/20 budget (meaning 50% of your budget goes toward essentials, 30% toward wants, and 20% toward savings) would call for an annual income of at least $84,456.

What is the cheapest state to live in?

The latest data from the Missouri Economic Research & Information Center (MERIC) lists Oklahoma as the cheapest state to live in, with a cost-of-living index of 83.5, far lower than California’s sky-high living costs. Meanwhile, U.S. News & World Report lists Arkansas as the most affordable state in the country.