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We lived in the Bay Area for 3 years. Prior to that, I agreed with you. Living there changed my mind. More of our salary went to the local economy than I expec
by mrkurt 10y ago
We lived in the Bay Area for 3 years. Prior to that, I agreed with you. Living there changed my mind.
More of our salary went to the local economy than I expected. We have a bunch of kids, which amplified the effect, but I am astonished at how much money it took to not feel like we were struggling to stay above water. Babysitting, gas, food, clothing, activities were all extremely expensive. Even insurance was high.
The things that didn't go to the local economy still cost more — because taxes. We bought a car from Minnesota and paid a huge amount of excise tax to the state of California. Almost everything we ordered from out of state was subject to high local sales taxes. Income tax didn't help either — our higher salary put us in a higher tax bracket. The top $50k of salary only netted us $25k in buying power, which was eaten up by rent.
- nostrademons 10y agoThere's a stage-of-life effect. Bay Area is great for young people, where cost of living is a much lower proportion of income. All the excess goes straight into savings or discretionary consumer goods, where a Bay Area dollar is worth just as much as a Rust Belt dollar. It's much less great for a family, where you have additional food, housing, childcare, and health costs that rise along with cost of living.
- mrkurt 10y agoI don't think that's entirely true. Housing and food are still the highest spending categories. Most of the excess goes to taxes, I think. Families just make it more obvious that's happening.
- chrisweekly 10y agoChildcare exceeds all other household expenses (incl housing) in a huge % of families. Wish I had stats to cite, none avlbl atm.
- mrkurt 10y agoOh yes. That wasn't a factor for us (stay at home parenting!) but school expense would have been if we'd tried to get our kids good schooling.
- eatbitseveryday 10y agoStaying at home to parent means a missing income. I would include that as a cost.
- morgante 10y ago> Housing and food are still the highest spending categories. They can be your highest spending categories and still leave plenty of room left over to save. As a young person living in NYC (high taxes, high housing, high food costs) I can still save a huge percentage of my income due to the high salaries.
- mrkurt 10y agoNYC is much more reasonable than the SF Bay. Manhatten itself is incredibly expensive, but it's fairly easy to live frugally in the NYC area. There's basically nowhere to go "in the bay area" to save much money. You're not wrong about NYC, but the bay area is really broken.
- morgante 10y agoIn my case, I was renting in Manhattan. When I've considered moving to SF I found plenty of comparable apartments for around $2.5k/m.