If you’ve ever looked at your bank account and thought, Why does living in California cost so much? — you’re not imagining things. New data from the Bureau of Economic Analysis confirms it: Californians spend about $8,640 more per person each year than the average American.
In 2024, total consumer spending in California hit $65,340 per resident, ranking fourth-highest in the nation. The rest of the country averaged just $56,700. But what’s interesting is not just that we spend more — it’s where the money actually goes.
Housing Takes the Biggest Bite
Housing is still the biggest financial hurdle in the Golden State. Californians spent an average of $12,840 per person on shelter, compared to $10,590 nationally. That extra $2,250 makes up roughly a quarter of the total spending gap.
And while that may sting, it’s not all bad news — California incomes tend to be higher too. The average personal income here was $86,300 per person in 2024, about $13,000 above the national average. In other words, we earn more — but we also pay more to enjoy the privilege of living here.
Healthcare and the “California Lifestyle”
The next biggest cost driver is healthcare, with Californians spending $11,050 per resident, or about $1,300 more than the typical American. From higher costs in major metro areas to a strong focus on wellness and preventive care, it’s another reflection of how the state’s economy — and culture — work.
But the California lifestyle itself also plays a huge role in our higher spending. Compared to the rest of the country, we devote more of our income to dining out, recreation, and personal services. Whether it’s grabbing brunch by the beach, catching a concert at an outdoor venue, or splurging on a weekend getaway, these small luxuries add up. Californians also tend to be younger, more active, and more experience-focused — which means we’re willing to spend a little extra to enjoy our time off.
Not All Costs Are Higher
Interestingly, Californians actually spend less than the national average in a few areas. Thanks to fuel-efficient cars and less time on the road, we save a bit on gasoline and vehicle costs. We also tend to spend slightly less on everyday goods like personal care items and household supplies — a small win for our wallets.
Paying for Paradise
In the end, California’s spending habits tell a story about trade-offs. We earn more and spend more, but much of that goes toward the things that make life here so uniquely desirable — the weather, the culture, and the quality of life.
Yes, living here costs extra. But for many Californians, that price is part of the package deal — a reflection of not just what things cost, but what we value most.
