I'm beginning to realize that I can't afford to live here anymore (San Jose: to rent, student loans)

[USDefault]

Originally Posted by ddowns46

What am I doing wrong?

You are doing nothing wrong at all. The simple fact is California is the worst state in the nation for young adults and young families just starting out. Highest income tax in the nation. One of the highest sales taxes in the nation. Highest gas prices and gas taxes in the nation. Among the most absurd and ridiculous housing market and prices in the nation, rivaled only by Manhattan in absurdity.

It is a quadruple whammy unfit for those who seek to build assets. You would be light-years ahead if you take your young career to a low-cost state, which will likely pay you as much, if not more, in income -- and it won't confiscate it the way California does.

Geographic arbitrage. Learn this term. Then live it while you are young. It will put you miles ahead of your peers.

You can search lots of state forums. Many, many California refugees to Texas, Nevada, Washington, really anywhere in the sunbelt. Uniformly people report their financial well-being skyrocketed after leaving California. Tons of posts in the Texas forums, for example, about how people could buy a nice home, and then stuff money hand-over-fist in their bank accounts, when freed from California's detestable cost structure. Many reports of how much easier things became, financially.

It's not you. It's California. Period.

[Ceece]

$70k in student loan debt at an in-state school? OUCH! This is why I'm making my son live at home and commute to the nearest CSU!

Until you get out from under that debt you are going to suffer. Unfortunately I don't know a solution to a problem like that.

[bobby_guz_man]

Originally Posted by USDefault

You are doing nothing wrong at all. The simple fact is California is the worst state in the nation for young adults and young families just starting out. Highest income tax in the nation. One of the highest sales taxes in the nation. Highest gas prices and gas taxes in the nation. Among the most absurd and ridiculous housing market and prices in the nation, rivaled only by Manhattan in absurdity.

It is a quadruple whammy unfit for those who seek to build assets. You would be light-years ahead if you take your young career to a low-cost state, which will likely pay you as much, if not more, in income -- and it won't confiscate it the way California does.

Geographic arbitrage. Learn this term. Then live it while you are young. It will put you miles ahead of your peers.

You can search lots of state forums. Many, many California refugees to Texas, Nevada, Washington, really anywhere in the sunbelt. Uniformly people report their financial well-being skyrocketed after leaving California. Tons of posts in the Texas forums, for example, about how people could buy a nice home, and then stuff money hand-over-fist in their bank accounts, when freed from California's detestable cost structure. Many reports of how much easier things became, financially.

It's not you. It's California. Period.

I think pride has made a lot of us hesitant to move away.

I remembered someone in my youth telling me "you were raised in California, your root is here, if you cannot make it here, then you have failed." Certainly at some point, survival necessity will take precedence over pride, but pride is really really strong especially if your family has been rooted in California.

There's a sense of elite-ism that Californians carry with them. Once they move out of state, they are no longer "elite". I know, it reeks of class discrimination but I think it's true in some ways--and I'm guilty of it to a certain sense as well

[Heidi60]

This video points out the fact that the middle class is being hollowed out in the Silicon Valley. The high paid foreign workers have pushed out the middle class so it really is time to just move on.

http://billmoyers.com/content/homeless-in-high-techs-shadow/

[BayAreaHillbilly]

Originally Posted by ddowns46

I was born and raised in San Jose, graduated from Cal Poly SLO with a Manufacturing Engineering degree, and have worked for a major defense contractor in Sunnyvale for the last two years. I live in San Jose.

I make $63k/yr and have $70,000 in student loan debt. I pay $750/mo on my student loans alone. I live in a small, very low quality house on a busy street with 3 other guys. I drive a $1200 '91 Ford Ranger i have to work on constantly to keep running. My share of the rent including utilities is approximately $800/mo. All my other living expenses are probably similar to most other folks living in this area.

My biggest dream is to own my own house. I'm saving money (~20k in 401k, another $10k in savings), but at the rate I am going, I wont be able to afford a down payment for at least another 5-10 years. Even then, I wouldn't be able to afford a mortgage either. Housing prices are only continuing to go up and thought of renting a small apartment for more than $1000 is very depressing to me.

My dad bought is first house in San Jose when he was 20 years old working as a machinist. What am I doing wrong?

Your employer is paying you peanuts. If they are in defense, I can't imagine your are competing with very many H1B indentured servants. I'd say it's time to look.

Beyond that, assuming you can crack the nut regarding pay, the COL is the tough one. All the outside money plus local "Facebook" type money is inflating the COL. That is compounded by the draconian land use policies.

The middle class is being driven out of the Bay Area and CA in general.

[BayAreaHillbilly]

Originally Posted by bobby_guz_man

I think pride has made a lot of us hesitant to move away.

I remembered someone in my youth telling me "you were raised in California, your root is here, if you cannot make it here, then you have failed." Certainly at some point, survival necessity will take precedence over pride, but pride is really really strong especially if your family has been rooted in California.

There's a sense of elite-ism that Californians carry with them. Once they move out of state, they are no longer "elite". I know, it reeks of class discrimination but I think it's true in some ways--and I'm guilty of it to a certain sense as well

Most of the old Californio type lines have left the state. Forget about being elite.

The "elites" here are now the Global Elites. They don't know a reatta from a rooting boar.

[easybay]

It's also tough to make the decision to move out of state. I've lived here my
whole life, and all of my family and friends are here as well.

You are missing out on a whole world of opportunity.....I feel sad that you don't have a sense of adventure and feel bound here. If you move for a different job in a different state - there will be people there to make friends with, and believe me - people will make excuses to come visit you, and you can always fly back to visit. The worse thing that can happen is that you have to move back.

In 25 years we have moved and lived in 6 cities in 4 states, 2 countries. Highly recommend!!!

[gone down south]

You have to chose between buying a house and living in the Bay Area, I'm afraid. Life is about compromises and trade-offs.
Run the numbers, it might make sense in the long run to continue renting and pump all that extra cash into savings.

[countofmc]

Huh, what do you mean you can't afford to live here anymore? You make over the median income even for the Bay Area, and you are saving a very high 40% of your pretax income.

You can most definitely afford to live here. You probably just can't afford to BUY a home right now, which is completely different.

[zombocom]

Originally Posted by ddowns46

I was born and raised in San Jose, graduated from Cal Poly SLO with a Manufacturing Engineering degree, and have worked for a major defense contractor in Sunnyvale for the last two years. I live in San Jose.

I make $63k/yr and have $70,000 in student loan debt. I pay $750/mo on my student loans alone. I live in a small, very low quality house on a busy street with 3 other guys. I drive a $1200 '91 Ford Ranger i have to work on constantly to keep running. My share of the rent including utilities is approximately $800/mo. All my other living expenses are probably similar to most other folks living in this area.

My biggest dream is to own my own house. I'm saving money (~20k in 401k, another $10k in savings), but at the rate I am going, I wont be able to afford a down payment for at least another 5-10 years. Even then, I wouldn't be able to afford a mortgage either. Housing prices are only continuing to go up and thought of renting a small apartment for more than $1000 is very depressing to me.

My dad bought is first house in San Jose when he was 20 years old working as a machinist. What am I doing wrong?

How old are you? 63k isn't exactly a bad starting salary for the first few years.

How did you rack up 70,000 in student loans going to a CSU?

That student loan is killing you, and is the problem. That's 15% of your gross income.