Is $170K really not enough? (Huntington Beach, Irvine: real estate, to rent, insurance)

[savannah11]

My husband and I, along with our 9 month old baby, are relocating from Houston to Huntington Beach next month. Together we will be making a combined $170K. It frightens me when I read on here that some people make this amount of money and still struggle to get by. Is it really not enough?

Let me say that we have no illusions of owning a home. I don't live by the philosophy that renting = bad, buying = good. We are renting here in Houston and while home ownership would be nice some day, I'm in no real hurry. We also do not have the expectation of settling in OC forever. I told my husband we'll give it a two year trial period. I know we'll be paying around $2500 to rent and $1000 in daycare but that is a manageable amount for us. What other costs are there that could make us struggle?

[JakeDog]

$170k is plenty. And with the housing market the way it is you can also afford a home if you so desire.

[Mach50]

170k is quite comfortable here, just don't live along the coast as rents go higher. For 2500 a month you could rent a 3/2 house in Aliso Viejo, Mission Viejo, Tustin and maybe Irvine.

I wouldn't be in any hurry to buy either.

[Charles]

Originally Posted by savannah11

What other costs are there that could make us struggle?

This is ultimately your question.


Sounds like you already researched the housing stuff which is 99% of the financial difference in SoCal and anywhere else in the US.

And the answer is basically not much. Gasoline is supposedly a little more expensive in SoCal. However, your electric bill would be a lot less since you need A/C for months and months in Houston. Food? Not sure. May be fresher and last longer in California (produce gets old in two days in Colorado, maybe because it ships from SoCal??...maybe the same thing in Houston???)

Sounds like you are doing everything correctly. Just keep getting data (where to live, schools, traffic patterns, etc.) and analyzing them.

[JakeDog]

I think a lot of the people who claim you can't live off of that make far less and are exagerrating about the costs or have made lifestyle decisions (high car payments, expensive clothes, eating out too much, expensive electronics) and blame those decisions on Orange County when they themself are to blame. you will be fine, and compared to most cities the cost of housing is similar relative to the good school districts in most cities. People talk about the high cost of Orange County and then ignore the fact that most areas in cities that are as safe as HB or Mission Viejo and have similar good schools are very expensive even if in Dallas/Atlanta, etc.

[Joe_Ryder]

I see no reason why home ownership is out of reach. I personally don't think buying anywhere is a good idea right now. This may sound odd but owning a home in Houston isn't significantly cheaper than in SoCal. Property tax in Houston is unreal. Electric rates in CA are much less to begin with and because the air is considerably drier in SoCal, Cooling systems operate more efficiently. Houston gets much colder in winter than LA so you also save on heating costs.

Homes in CA may seem more expensive than Houston but Harris county more than makes up the difference in taxes from the consumer's point of view. I'm originally from Houston and most of my family is still there.

Gasoline is more expensive than Texas but since we don't have the high alcohol content, our cars will tend to get better fuel economy and our engines last much longer. A car with over 200K trouble-free miles is not uncommon.

Even up here in the SF Bay Area where fuel, home, insurance, etc. prices are very high, $170K a year is more than enough to live comfortably. Any regular sized family without any unusual problems who can't make ends meet on that income simply doesn't know how to manage money. Most of the complainers in all the regional forums will find exactly the same problems no matter where they go simply because they don't have any sense.

If you're running up $2K/Mo cell phone bills just chatting and have to buy the latest and greatest of everything, you'll have problems. The biggest problem I see is that people as a whole have gone insane and spend like there's no tomorrow. It sounds like you're reasonable and level headed so you should have no problem at all.

[Lindyscribe]

You will be fine. Don't worry.

[oc2nyc]

I think most people think you can't make it out here on a good income because they live beyond their means. It is a competetive environment in OC, everyone wants to live like their neighbors. If you don't fall into that trap you will be fine. It really depends on the lifestyle you want to live. You could struggle anywhere on $170k if you don't spend wisely. If you want to live by the water be prepared to spend a lot of your income on housing costs, but if that is not important you can find nice areas for your income. I personally feel it is too expensive to live here, but we are trying to raise four kids, 3 being teens, who want what all their friends have. We also need a larger house than you will need for just the 3 of you. If I had my choice I would not raise kids here. If you have only one child right now, and don't plan on staying, you will have a great experience, enjoy some nice weather, and have plenty of things to do. Give it a shot!

[ndfmnlf]

It depends on how sustainable that $170K income is. If you and your husband work in a stable, recession-proof industry (eg health care), then there is little to be concerned about. However, if your incomes are tied to industries in turmoil and are cyclical in nature (eg real estate, finance), then I'd be a little nervous about making the move. Your $170K may just as well evaporate into thin air by next year.

[Charles]

Originally Posted by Joe_Ryder

Homes in CA may seem more expensive than Houston but Harris county more than makes up the difference in taxes from the consumer's point of view.

This may be true, but the breakeven point is probably like 75 years.