It’s no secret that living in Los Angeles can be a costly affair, and new analysis from a personal finance website shows the high price of living worry-free in the City of Angels.
Utilizing recent Census data, home value analysis from Zillow and Bureau of Labor Statistics, GoBankingRates.com found some alarming figures for responsible adults who want to stick to a reasonable budget.
The study, released late last month, shows that Angelenos should hope to have a salary in the range of $194,000 to live comfortably.
L.A. was the fourth-most expensive city, trailing three other California cities atop the list in San Jose ($264K), San Francisco ($251K) and San Diego ($206K). Long Beach came in at No. 6, with a salary for comfortable living around $179,000.
The finance website used the 50/30/20 rule when creating its rankings. The popular budget template breaks down regular spending to 50% for necessities, 30% for wants and desires, and 20% for savings and debts.
While there isn’t a perfect criteria for living “comfortably,” the analysts at GoBankingRates doubled the cost of necessities in order to find a figure that would comfortably cover costs of living.
While the price of necessities in L.A. was around $97,400, when doubled to ensure that a salary comfortably clears the demands of big city living, you get the $194,000 figure.
“The biggest takeaway from the study is how L.A.’s high cost of living continues to challenge affordability, even for six-figure earners,” said CJ Williamson, Researcher at GOBankingRates.
California cities were affected most by the average home value, including in L.A. where the average home’s value exceeds $1 million, Williamson said.
But rising prices and demanding salary requirements is no longer a uniquely California thing.
The study analyzed the 50 most populous cities in the U.S., and found that more than half of those cities would require six-figure income to meet the comfortability threshold.
Below is a list of the 20 most expensive cities:
The lowest salary needed for comfortable living in the nation’s 50 biggest cities is Detroit at around $65,000.
KTLA consumer reporter David Lazarus says that while the study’s results aren’t particularly shocking, and while “living comfortably” can be interpreted in many ways, the study “illustrates the growing difficulty of simply getting by.”
To read more about the study and its methodology, click here.
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