We all know that California is a pricey place to live.
However, what drives those higher expenses is not just housing, although putting a California roof over your head is the largest expense.
To gain insight into California costs, my trusty spreadsheet reviewed detailed consumer spending statistics from the Bureau of Economic Analysis. These numbers allow us to track key components of household expenses in 2024 for the 50 states and the District of Columbia. It’s calculated per resident, so much like an average, the biggest and smallest spenders can influence the results.
California’s overall consumer spending in 2024 equaled $65,340 per resident, the fourth-highest among states. That was $8,640 more than $56,700 spent nationally.
Most of California’s extra spending was tied to buying services – and this math sees housing as a service.
Californians spent $46,360 for services per resident, the third-highest level among the states. That was $8,070 extra compared to the nation’s $38,290.
Contrast that large gap with the smaller one for goods. Thanks to the state’s highly competitive retail market, online shopping, and its huge agricultural industry, Californians can buy goods at prices closer to the national norm than you may think.
Californians spent $18,980 per resident on goods last year, just $570 above the $18,410 spent nationally.
Big paydays
California’s lofty spending isn’t just about the state’s high cost of living.
Do not forget the state’s substantial earnings, which also contribute to increased spending.
Consider the personal income per resident yardstick, the bureau’s comprehensive measurement of all types of incomes, including those from jobs, businesses, investments, and government assistance.
California’s $86,300 personal income per resident ranked fifth-highest among the states for 2024 – and was $13,100 above the nation’s $73,200.
And California life is different.
More spending on services, outside of shelter, reflects affluence – plus a younger population, good weather and lifestyle choices.
And some transportation spending may surprise folks about a car-loving state. However, compared to the typical American, Californians drive fewer miles, own fuel-efficient cars, and use mass transit.
Where did it go?
It’s zero surprise that California’s housing and utilities expenses – the costly bane of the Golden State – had the biggest gap with the national norm.
Californians spent $12,840 per resident (fifth-highest among the states) on shelter. That’s $2,250 above the national expenditure of $10,590. So, roughly a quarter of California’s above-average spending is allocated to housing.
The second-largest spending divide was for healthcare. Californians spent $11,050 per resident (No. 11) – $1,310 more than the $9,740 expended by a typical American.
Other excess
Consider other parts of a household budget where California tops the U.S., ranked by the size of the gap…
Personal services: $1,180 more – Californians spent $6,100 per resident last year (sixth-largest among the states) vs. $4,920 nationally.
Dining out/accommodations: $1,170 more – $5,370 spent (No. 4) vs. $4,200 nationally.
Recreational services: $1,000 more – $3,290 spent (No. 3) vs. $2,290 nationally.
Transportation services: $610 more – $2,550 spent (No. 6) vs. $1,940 nationally.
Financial/insurance: $560 more – $5,150 spent (No. 12) vs. $4,590 nationally.
Clothing/footwear: $490 more – $2,050 spent (No. 2) vs. $1,560 nationally.
Food and beverages: $450 more – $4,800 spent (No. 12) vs. $4,350 nationally.
Recreational goods: $210 more – $2,160 spent (No. 14) vs. $1,950 nationally.
Jewelry, watches, luggage, sports gear: $160 more – $1,020 spent (No. 3) vs. $860 nationally.
Home furnishings/appliances: $60 more – $1,500 spent (No. 16) vs. $1,440 nationally.
Below par
California spent less than the national norm last year in three categories.
Gasoline/energy: $80 less – $1,220 spent (No. 36) vs. $1,300 nationally.
Drugs, personal care and cleaning supplies, toys: $310 less – $4,490 spent (No. 31) vs. $4,800 nationally.
Vehicles/parts: $410 less – $1,740 spent (No. 50) vs. $2,150 nationally.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
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