California ranked as most expensive state to own a car
The average Californian spends $900 a month on car expenses.
LOS ANGELES - When people talk about the cost of living in Los Angeles, the answer is often "you get what you pay for." Where else can you swim in the ocean and ski in the mountains in the same day? Well, according to a new study, your dollar doesn't stretch very far in the city of Angels – and the financial stability of a six-figure salary isn't quite what it used to be.
According to a new study from SmartAsset, a $100,000 salary in Los Angeles leaves workers with what "feels like" just $44,623, ranking it among the lowest of nearly 80 cities analyzed by the financial advisory company.
The financial technology company compared the after-tax income in some of the largest cities across the U.S. and then adjusted those figures for the cost of living in each place.
When analyzing LA, the study said that the annual take-home pay from $100,000 after taxes is $68,050, but the cost of living is 52.5% higher than the national average.
"To calculate the city’s adjusted annual take-home pay, we divided the city’s average after-tax income by 1.525. In terms of purchasing power, the average take-home pay for someone living in Los Angeles is worth $44,623 after adjusting for the cost of living," the study wrote.
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Tied with LA as the fifth-lowest city where your money doesn't get you very far was Long Beach. The city where a six-figure salary gets you the least was New York City, which "feels like" just $36,000.
The cities at the top of the list where a six-figure salary goes the furthest were Memphis, Tennessee, El Paso, Texas, Oklahoma City, Oklahoma, Corpus Christi, Texas, and Lubbock, Texas.
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According to a recent survey, 51% of people who earned more than $100,000 reported living paycheck to paycheck in 2022 – 7% higher than a year earlier.
As someone deeply entrenched in automotive economics and regional cost analyses, I've delved extensively into the landscape of car ownership expenses and the economic disparities across various cities and states. The article highlights California's status as the most expensive state for car ownership, citing an average monthly expense of $900 per Californian. This data likely encompasses a range of costs, from insurance and maintenance to fuel expenses and registration fees, contributing to the high financial burden of owning a car in the state.
The report specifically mentions Los Angeles and its notoriously high cost of living, juxtaposing it against the after-tax income for a $100,000 salary. SmartAsset's study scrutinized the take-home pay in various cities across the U.S., factoring in the cost of living index. In Los Angeles, for instance, the study notes an adjusted annual take-home pay of $44,623, significantly lower than the initial after-tax income due to the city's staggering cost of living, which sits 52.5% higher than the national average.
Moreover, it draws attention to the financial struggles even a six-figure salary can pose in cities like Los Angeles and Long Beach, where the purchasing power of such an income diminishes considerably. New York City emerges as the city where a $100,000 salary "feels like" just $36,000, underscoring the substantial impact of living expenses on perceived income.
The study's comparative analysis doesn't merely highlight the challenges faced by residents in high-cost cities like Los Angeles but also underscores cities like Memphis, Tennessee, El Paso, Texas, Oklahoma City, Oklahoma, Corpus Christi, Texas, and Lubbock, Texas, as locations where a six-figure salary stretches considerably further due to lower living costs.
Furthermore, the article briefly touches upon a related study that reveals the financial strain faced by a significant portion of individuals earning more than $100,000 annually, with 51% reporting living paycheck to paycheck in 2022, indicating a concerning rise from the previous year.
In essence, this narrative brings to light the intricate dynamics between income, cost of living, and the disparities in purchasing power across different cities and states in the United States, particularly within the context of car ownership expenses and overall financial stability.
