Just a general salary to living quality question..

[mysticaltyger]

Originally Posted by 2peaches2oranges

Yes, housing costs, especially to buy, are out of reach. I pay $1500 in rent now for a 2/1 house. In my neighborhood, to buy my house, would be $499K or a $3300 mortgage if I go FHA with 3.5% down. I would not even qualify with my income. So I keep renting, and saving more money.

Sounds like we're mostly agreeing. If it's any consolation, $1500 is on the low end for a 1BR apartment here in Silicon Valley...and I'm just talking about the ordinary neighborhoods, not the pricey ones.

I rent and save a lot my retirement plan, but if rent increases keep outstripping my income, I'll be forced to save less. You can only cut your other expenses so much

[mysticaltyger]

Originally Posted by 2peaches2oranges

Well, I am probably not saving as much as I should, but as a federal employee (with 10 years in), I have a decent retirement plan that I contribute 6% (bingo) to, and an old ROTH IRA that I have had since 1999 growing. I did not work for 8 years while married/having kids and then my divorce left me in a tough financial position trying to reenter the workforce again at a livable wage. Currently, I save about $500 a month after bills each month and have about 4 months emergency cash saved.

I am in my early 40's and yes, I get scared that I might be a homeless bag lady one day. But I think I am doing pretty well for my situation right now. Not perfect, but life is good.

Thanks for sharing. It sounds like you're doing better than average. Unfortunately, the average person has little saved in bank accounts or for retirement. I also work in the public sector and our pensions are being scaled back. I really don't want to depend on my pension in retirement because I don't trust it will be there, but I know I am still better off than most people of my age & income level at this point....but things can change for the worse over time.

$500 a month sounds like good savings, but not if you're saving for a house in CA.

[EdJS]

Yes, housing costs are the critical thing.

I've been living in the Bay Area for almost 30 years. For the first ten years I lived with roommates. That was the only way I could afford it. It was only after I had become established in my career, so that I had a decent salary, that I could afford to move into a (very tiny) apartment on my own. And then I had a wait some more until I could actually afford to buy a home.

A lot of people get around the housing cost problem with roommates here.

Was it worth it? I think it was. But you must decide for yourself.

[NoMoreSnowForMe]

Most people don't get to buy their first house where they work. It's a matter of priorities. I don't buy all this wah wah, I can't afford housing.

My daughter bought her first house at age 30. She worked in Monterey, but could afford to buy in South Salinas. Her house payments were $100 less per month than her rent had been. She was making just under $80,000, and did it all on her own with 3.5% down FHA loan. Her payments on a 2/1 on the edge of the best neighborhood in Salinas were about $1500/ month. The duplex she had been renting was $1600/month.

Then 4 years later, interest rates went down and FHA let her do a streamline from around 6% interest to about 3.25% interest. Her payments went down to about $1000 per month. She rents that house out for about $1400.

Last year she bought another home in the Oakland hills, again on the edge between good and not-so-good neighborhoods. She bought a 2/2 with amazing views for $315,000. She was making $110,000 when she bought the second home with FHA financing, again with 3.5 % down. FHA let her buy another home and turn the other into a rental, because she moved 2 hours away from her last job -- too far to commute. Her house payments in Oakland on a hill with a view of the city lights at night -- $2,000/month. Cheaper than rent would be.

She bought both houses on her own, with no help from Mom or Dad. She splurges on HBO, but kept her car after it was paid off, until she bought the 2nd home, and after it was totaled in a car wreck. She's always trying to teach her friends how she did it - friends who have 2 income households who swear all they can do is rent. But, they don't want to compromise. They don't want to live in Salinas, they want to live in Carmel. They don't want to drive an older car, they need their new cars and their car payments. They need to go out all the time and go on vacations, etc., etc.

So, I don't buy that it can't be done. It's a matter of priorities and compromises. My daughter will be able to afford to go on a vacation next year - for the first time in about 10 years. After she bought 2 houses in California in decent neighborhoods. Not the best neighborhoods, but decent neighborhoods. The rental pays for itself, and will be a source of income when she retires and is a great write-off now. And she's just turned 35.

So anybody who says all you can afford to do in California is rent? I say dial 1-800-wah-wah. There will always be people like my daughter who will rent to you, while you enjoy your expensive cars and steaks and martinis, etc., etc., and clink glasses with other people with car payments who commiserate with you about how you can only afford to rent in California.

C'est la vie.

[SOON2BNSURPRISE]

Originally Posted by Sweetbottoms

Just curious here so humor me. Hubby and I had always entertained moving to Cali, never seriously but we look at places jobs etc just to see what's out there. Given the COL and high income tax it feels pretty unattainable. Any who jobs in his field are paying on average about $36 an hour (LA area, I have a brother who lives there) what's someone's ( and I mean in a very general sense) living quality like out there with that pay? Two adults one child nothing fancy to speak of. Is that salary actually able to support a family and not live check to check or is that wage considered low for Cali?

First off, it is a big state. Where in California (and yes we call it that not Cali.) Are you also planning on moving to? the LA area like your brother? Some mentioned that you could buy a home in the Inland Empire and commute. That could turn an 8 hour work day into a 12 hour work day. With the price of gas and cooling your home in the inland empire I don't know if the cheap prices are that cheap after all. Most seem to hate making 2 hour drives just to get to work each day. In the LA area no one mentions miles to work but time to work. Lets say that you are on the 405 and have 8 miles to get to your off ramp. That could be a 20 or 30 minute drive at times.

What field is your husband in? Is it the same as your brother? Not all fields will pay the same. Also is that a starting wage or did your brother spend time working up to get that money?

My wife and I work at the same hospital and it is about 8 miles to work. We love it. We were able to buy our home at close to the bottom of the market three years ago. We were first time buyers and got a Cal HFA loan with a 3.875% interest rate fixed for 30 years with 3% down. Our home has increased $100,000 in value since we bought it, we are told anyway. A realtor recently left a sheet listing comp's in our area and they are all in the range that would make our home's value at least $100,000 more than when we paid. He wanted to know if we wanted to sell. LOL. We are never selling. I add that in there so you can see that prices have gone up and between my wife and me we are in the $6 figures in income living on the coast. Not sure I would try it on $38 an hour.

[NoMoreSnowForMe]

Good advice. We don't call California "Cali" here. It would be kind of like calling Minnesota "Minnie." Nobody here shortens it at all. It would make you stick out like a newcomer....who doesn't know the ropes.

Like nobody around SF calls it "Frisco." We cringe. We either call it "the city" or "San Francisco." NEVER Frisco.

When I moved to the Pacific Northwest, the first time I saw the word "Willamette" I pronounced it like you would French, which is not how the local pronouce it. I said "Will-ah- met" with the accent on "met." Wrong. In the Portland area, you say "Will-ah (like the "a" in "axe") met." With the accent on the ah. Sounds really hick, but that's how it's said locally, and you are the one who will sound like a hick if you say it with a French accent.

Anyway, welcome to "california."