The Cost of Living in California vs Texas

Moving to a new state is a big decision. California has the largest population in the United States closely followed by Texas. The chances are if you are looking to move out of state, you have looked to either California or to Texas.

People tend to relocate to be near family. The second reason people relocate is for economic reasons. The economic benefits are often what draw people to Texas and California.

Both California and Texas have not only the largest populations but the largest habitable landmass of any of the U.S. states. This means there are not a lot of statements that can be made which represent either state in totality. In this article, we will let you know the general cost factors to consider when making a decision to relocate to either state.

The beauty of both states is the amount of choice they can offer. Texas and California are so vast one can live how they choose in either region. But what are the Pros and Cons of choosing to live in California over Texas or Texas over California?

In essence, it comes down to money. Simply put, California is more expensive than Texas in every way. The Pros and Cons come with a lot of costs we will help you weigh.

Come with HOMEiA as we explore the seven factors to consider in the true costs of choosing California or Texas for your new home.

1. The Living Wage in California and Texas

What does it take to live in California or Texas and still earn a living wage? A lot, it turns out.

In California, a living wage for a single adult working full time is $14.99 an hour (as of August 2020). An adult in California with two children is expected to earn $37.46 per hour. With two children it is expected a single earner makes $65,245 a year in their profession.

In Texas, a living wage for a single adult is $11.74 an hour. A single adult with two children would have to earn $27.83 an hour to make ends meet at the living wage level. With two children, it is expected that a single earner makes $50,795 a year in their career.

Texas is clearly the better off the two states to raise a family in. Living in California over Texas means a single earner must make an additional $15,000 a year. In Texas, raising a family is considerably easier than in California.

Relocating to either state usually requires having landed a job before moving. The cost of housing makes it very risky to move before having landed a job, especially in California with its high housing costs.

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2. Housing Costs

The cost of a home in Texas is drastically cheaper than owning a home in California. The average cost of a home in the U.S. is $231,000. A home costs 60% more in California compared to Texas.

In Texas, the median home price is only $195,000, which is lower than the national average. This means on average homes are about $36,000 cheaper in Texas compared to the national average. This is a huge advantage for Texans.

In California, the median home price explodes to $552,800! That means California’s homes are $321,000 more than the national average which is like paying for two homes in Texas. This is perhaps the largest deal-breaker when considering California over Texas.

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3. The Economy

California has a vibrant and robust economy. In fact, California has the largest economy in The United States. If “The Golden State” were a sovereign nation, it would be the 5th richest in the world. The economic opportunities of California are bountiful.

Texas is an economic powerhouse as well. If “The Lone Star State” were a sovereign nation, it would be the 10th richest in the world. When you compare economies, both are attractive places to buy a home and run a business in.

However, when looking to Texas it can be easy to see the cheaper costs of living and conclude it is the state for you. The minimum wage in California is $12 whereas it is only $7.25 in Texas. This disparity means wildly different things to business owners, workers, young people, and the elderly looking to supplement their income.

The service industry is large in both economies. California allows service workers to earn a living wage. Whereas in Texas, servers receive about $2 per hour and then are reliant upon tips to fill in the rest of their earnings.

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Sales tax in Texas ranges from 6.25% to 8.25%. In California, the sales tax ranges from 7.25% to 10.25%. This means Californians can pay up to 4% more in sales taxes which means larges purchases like home appliances and cars can actually cost you quite a bit more money in California.

Texas and California are both car-based economies where driving is essential in certain areas. The cost of regular gasoline averages out to $1.88 in Texas. Whereas the cost of regular gasoline in California averages out to $3.20 with a 50.5 cent tax per gallon.

Electricity is cheap in places like El Paso and San Antonio where power monopolies exist. However, in deregulated areas, Texans pay considerably more for their power and air conditioning in the summertime. The average cost of a utility bill in California is $101.00. Whereas in Texas it averages out to $122.00.

Texas wins out for the elderly when it comes to state income tax. There is no state income tax in Texas. This is a huge benefit for retirees.

The state income tax in California is amongst the highest in the nation. However, a small concession is that the property tax in California is below the national average.

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4. Safety

The cost of safety and peace of mind is incalculable. It is important to know the risk of living in “The Golden State” as well as the “The Lone Star State.” With increased population comes increased crime and the emotional costs associated with it.

Neither Texas nor California fare well when compared to the national averages for violent crime. But their numbers do not portray either place as a combat zone.

Texas has a violent crime rate of 410.9 per 100,000 people. California has a crime rate of 447.4 per 100,000 people. Texas is statistically safer than California overall.

Violent and property crimes in Dallas totaled out to a yearly 55,591 and is 7% safer than most U.S. Cities. Whereas Los Angles had 133,182 yearly crimes but the city is still 12% safer than most in the U.S. because of the population density.

The safest city in California is Danville and the safest city in Texas is Fulshear. Do not let the crime rates scare you away as there are plenty of safe cities in both states.

5. Environment

Before Californians begin leaving for Texas for the savings, there are some factors to take into consideration. Texas and California are very different places.

California is a coastal state. That accounts for a large part of the costs in real estate prices. Coastal property is very attractive; many people just feel at peace next to a relaxing ocean.

Sitting on the beach listening to the sound of the ocean and the waves crashing on the shore are some of the most relaxing activities Californians regularly enjoy.

That isn’t to say Texans lack such activities. Lake Texoma offers sailing and surfing. It’s just that most Californians have close access to the beach in some way.

Both states also clearly have huge urbanized areas. By the same measure, both states have small towns too.

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6. Education

Education is important. Unfortunately, attending universities usually costs money. What is the cost of education in California and Texas?

In Texas, for the 2019-2020 school year, it cost about $36,880 for tuition and fees at a private university. The average private university cost in California is $32,964. Attending a private school in California is about $4,000 cheaper than in Texas on average, which can amount to $16,000 in educational savings.

TX For in-state residents college ran about $10,440 for state colleges on average. In California, the UC system of schools averaged out to $12,570 in systemwide tuition and fees. per year for a full-time undergraduate student.

The cost of attending college in the Cal State system is $5,742 for the base tuition and campus fees per semester. A year of a state school in Texas runs about $10,824 which makes them pretty different.

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7. Child Care in California Versus Texas

Childcare is not cheap anywhere. Childcare is almost like paying for college tuition in both California and Texas.

California is the 12th most expensive state for childcare in the United States. It is estimated that it will cost about $12,000 a year with some averages saying $985 a month, per child. A family with two children can expect to spend $20,000 a year in childcare alone.

Texas ranks as the 31st most expensive in the nation. Putting a school-age child in daycare in Texas runs about $7,000 a year or $600 per month on average. With two children costing about $14,000, a Texan is saving about $6,000 compared to Californians.

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In Closing

California does not seem to have many advantages when the true cost of living is compared to Texas on paper. It is impossible to quantify the feeling of living in California compared to anywhere else in the world. Why would anyone choose to live in California over a very practical state like Texas?

People do not live in California because they are simply impractical with their money. People live in California because they fall in love with the state. There’s a beauty and climate in California unlike most anywhere else in the world.

That is not to say the prairies and deserts of Texas do not have their own charms. They do. Dallas and San Antonio are two of the most amazing cities in the United States.

It ultimately comes down to where one finds their family the happiest. The savings of living in Texas allow for the possibility of a tropical vacation every year. At the same time, there’s something to be said for living near the Golden Gate Bridge or Disneyland in California.

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Both states are warm and amazing places to live. Texas has a little harsher winter than California and most would say the small towns in Texas move at a much slower pace than the average small town in California, but that’s a culture factor that’s impossible to quantify.

Both Texas and California have the aerospace industry and strong technological industry bases for white-collar workers to utilize. Both have vibrant service industries as well. And both states have urban and rural places of great beauty with diverse communities and populations.

Entertainment, food, and culture are abundant in both states. Eating out and Entertainment are also about 5.5% cheaper in Texas. However, there’s a lot to be said for the entertainment and quality of options in California.

Hopefully, HOMEiA has helped you see the true cost of living in California and Texas. There is no right answer and all of these factors will mean different things to different people. The best recommendation for you is, if you can, to stay in each state for at least 6 weeks to see how you feel about each of them before making your big relocating decision. We hope you find this article helpful, please share this article with your friends and family who are considering relocating to California or Texas. Thanks in advance!

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