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Have you ever felt that your salary should be higher than it is?
In California, the line between “doing fine” and “just doing” can be surprisingly blurry.
SmartAsset has crunched the middle class across America, including in major cities. In California, a family is considered middle class if it earns between $63,674 and $191,042 – although in some cities, the numbers may vary slightly.
With the skyrocketing cost of housing and rapidly increasing everyday expenses, it begs the question: What does it really take to be considered middle class in the Golden State?
Middle class income varies by city in California
According to Kevin Marshall, CPA and key contributor smithy toolsYou need about $63,674 each year, but of course, money changes as some cities are more expensive than others.
For example, in San Francisco, they said you need about $84,488, and in San Jose, about $90,810.
“That’s because rent, gas and certain costs are more expensive in different cities,” Marshall said.
Elizabeth Rivelli, personal finance expert bestmoneyshared that by 2023, the official starting point to be considered middle class in California is approximately $64,000 a year.
“It’s calculated like this: You have to earn at least two-thirds of the state’s median household income, and in California, that’s about $95,521,” Rivelli said.
He echoed Marshall, saying: “California is obviously big and you have to consider where you actually live.”
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California’s middle class pays more – and saves less
Life is very difficult for middle-class families in California, Marshall said.
Even though a family earns about $130,000 a year, he said they have to spend about $29,753 more than families in other countries because the cost of everything from household necessities, basic groceries, gas, child care and health care is much higher.
“And on top of all that, there are high taxes. There’s an income tax of 13.3%, and a sales tax of 8.8%, and when it all adds up, it’s hard to save any money,” he said.
Smart strategies help California families grow their money
According to experts, there are several ways to streamline middle-class living in California.
Marshall said retirement accounts like 401(k)s and health savings accounts (HSAs) reduce taxes and help you save.
Plus, homeowners can use exemptions to reduce property taxes, and some veterans or disabled residents can save even more.
Many people earn extra income through side jobs like ride sharing or food delivery.
Budgeting methods, such as the 50-30-20 plan — 50% for needs, 30% for fun, 20% for savings — can also help.
Some families save by living with relatives. With the right tools and strategies, it’s possible to manage costs and still plan for the future.