San Diego is famous for its sunny weather, pristine coastline, career opportunities and laid-back lifestyle. Residents agree that “America’s Finest City” is one of the best places to live in California, but it’s not particularly affordable.
San Diego ranked No. 1 as the most expensive city in the nation to live, according to a 2023-2024 U.S. News analysis of the 150 largest metropolitan areas in the U.S. Yet many residents say they’re happy to pay the added expense to live there, even referring to the higher cost-of-living as the “sunshine tax.”
How do people do it? To find out, we spoke with Lauryn Hock, who recently moved to San Diego from Utah. Hock shares a home and joint expenses with her husband, who works in marketing as an ad campaign manager. Hock broke down her family’s monthly expenses and explained how they afford America’s most expensive city.
— How much this San Diego resident spends each month to live in the most expensive city in the U.S.
— How expensive is it to live in San Diego, on average?
— Why does San Diego have such a high cost of living?
— What is a comfortable salary in San Diego?
— How do you budget in a high cost of living area?
— What’s the biggest living expense in San Diego?
— How much is an average meal in San Diego?
— What’s the most expensive neighborhood in San Diego?
[See: The Best Places to Live By the Beach in the U.S. in 2023-2024]
How Much This San Diego Resident Spends Each Month to Live in the Most Expensive City in the U.S.
Name: Lauryn Hock.
Where do you live? San Diego (15 minutes from downtown).
How old are you? 32.
What is your occupation? Social media marketing specialist and marketing manager.
What is your household’s monthly income? $9,500.
What are your fixed monthly expenses?
— Rent: $2,100 (our utilities and internet are fixed and included in our rent)
— Renter’s insurance: $15
— Laundromat: $75
— Student loans: $150
— Car payment: $320
— Car insurance: $150
— Cell phone bill: $180
— Workout classes and fitness studios: $215
— Miscellaneous TV/app subscriptions (Netflix, Hulu, Prime, Adobe Photoshop, phone apps): $150
— Health insurance: $200
— Savings: $200
— Total: $3,755
How much do you spend on groceries per month? $900.
How much do you spend on transportation per month? $240 in gas, $50 rideshare, $20 parking, on top of $150 car insurance and $320 car payment.
How often do you dine out? 4-6 times a week. (I’m including breakfast, lunch and dinner here.)
How much do you spend per month dining out? $550.
When did you move to San Diego? February 2022.
Where did you move from? Salt Lake City.
What were your moving costs? Moving van $1,200, gas $500 for van and car.
[Read: How to Create and Maintain a Family Budget.]
How Expensive Is It to Live in San Diego, on Average?
The cost of living in San Diego is 44% higher than the national average, based on data from compensation management platform Payscale. Everything from housing, utilities, groceries and transportation costs more in this coastal city.
After moving to San Diego from Salt Lake City, Hock noticed she was paying $2 more per gallon for gas, the same in rent for less square footage and services, and about $5 more per plate when eating out at restaurants. The couple pays about the same each month for rent as they did in Salt Lake City, but to afford to live in San Diego, they sacrificed the size of their living space and available amenities.
Hock says she and her husband live comfortably and aren’t living paycheck to paycheck. However, this also means the couple cannot live a lavish lifestyle or purchase a home of their own. “Besides going out to eat, we tend to live within our means,” she says. “If either of us lived on our own, we would not be able to live as we do right now. Having a marriage partner is essentially like having a roommate to share expenses with.”
Why Does San Diego Have Such a High Cost of Living?
San Diego’s cost of living has always been high compared to other parts of the state and country, according to David Michan, a San Diego realtor, investor and manager at Terra Equity Management. The city has some of the best weather in the country, he says, and there are great beaches, mountains, parks and lakes nearby.
Living in this Southern California beach city requires a financial commitment. When it comes to typical housing costs, San Diego ranked at No. 146 on U.S. News’ annual list in 2023-2024, with residents needing 30.9% of the area’s median household income to cover housing costs. And price parity shows that typical goods and services are more expensive in San Diego, for which the metro area ranked 148th.
“Lately, there have been many people leaving high-priced colder climate cities such as the Pacific Northwest and San Francisco Bay Area, selling their houses for multiple millions and coming here and overpaying for houses,” Michan says. “There are also less people selling, which has caused a shortage in housing with still a high demand pushing prices up.”
[Is it a Buyer’s or a Seller’s Market?]
What Is a Comfortable Salary to Live in San Diego?
Living comfortably means being able to pay for basic needs and afford extras without hurting your budget or having to make sacrifices. To live comfortably in San Diego, Michan recommends a household income of $90,000 to $110,000. But if you have children, he says you’ll need to make between $120,000 and $150,000, depending on how many children you have and whether they go to private or public schools.
According to U.S. News data, San Diego’s median home price is $919,507, while its median monthly rent is $1,842. The average annual salary is $67,200, which means most San Diegans cannot afford to purchase a median-priced home or live in an apartment without roommates.
If you plan to buy a house, Michan says it would require a household income of $180,000 per year at a minimum with a 20% down payment and above $220,000 per year with a down payment of 10% or lower.
How Do You Budget in a High Cost of Living Area?
Hock says they save money on rent by choosing to live in a smaller space. If they could spend more, she says, the couple would opt to expand their living space.
“I also take advantage of a lot of free events that are offered in a big city,” Hock says. “There are so many ways to get free entertainment, activities, workouts and food when you look around for what the city and local businesses are offering.”
The couple also saves up for an annual vacation. But for most of the year, they explore their own city like tourists.
What’s the Biggest Living Expense in San Diego?
“Rent, absolutely,” Hock says. “Ninety percent of the people I know are either married and sharing expenses or living with roommates.”
According to Payscale, housing in San Diego is 123% higher than the national average.
How Much Is an Average Meal in San Diego?
Groceries cost about 12% more in San Diego compared with the national average. Using data from the U.S. Department of Agriculture’s Low-Cost Food Plan, the Massachusetts Institute of Technology’s Living Wage Calculator estimates that San Diego households with one adult and no children spend $4,450 per year on food, and up to $15,947 per year with two adults and three children.
Hock and her husband spend about $900 per month on grocery bills, or around $10,800 per year. They also spend $550 per month to dine out four to six times per week for breakfast, lunch or dinner. That adds another $6,600 to their food budget.
What’s the Most Expensive Neighborhood in San Diego?
The most expensive neighborhood in San Diego is Rancho Santa Fe or Fairbanks Ranch, according to Michan. These communities have also been rated as some of the most expensive ZIP codes in the country.
But if you want to live somewhere more affordable, Michan says, pay attention to the crime level. “Escondido, Vista, Clairemont Mesa, Mira Mesa and Oceanside are all good and up-and-coming cities and neighborhoods that are considered to be more affordable and relatively safe,” he adds.
More from U.S. News
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4 Tips to Make Buying a Home Together Easier
Tips for Renting in Big Cities With Low Availability
How I Budget to Live in the Most Expensive City in the U.S. originally appeared on usnews.com
