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My husband and I love California and have family here, but we are seriously considering leaving the state for financial reasons. Property taxes are astronomical and tuition is high. It’s important to point out that we are both professionals, with a household income of nearly $500,000 a year, but are just barely getting by. From a financial perspective, does it make sense for us to move to another state?

California Couple



The cost of living in California is unquestionably high. I say this as a Long Island resident, where the cost of living is also relatively expensive compared to most other parts of the country. However, from what I have heard and read, California is on a different madreigah regarding this.

Anecdotally, over the past few months, I’ve had several clients and friends tell me that they are leaving California for more affordable states. I even received a letter in my mailbox last week from a woman with a California phone number looking to buy our house. I imagine she dropped the same letter in many mailboxes in the community, eager to find a new home.

While I can’t advise anyone on their specific financial situation without having more information, I can outline a few considerations that may help with your decision.

Savings: You mentioned that you are just getting by financially. Is that after you maxed out your retirement accounts, or before you saved anything for retirement? This distinction is important. If you can pay your bills and save for your financial future, you are actually in a good financial position despite the high cost of living. On the other hand, if you are unable to save anything for retirement, then it’s hard to justify living in such an expensive place.

Renting vs. Buying: The renting versus buying debate can be discussed at great length. However, put simply, if renting is more affordable than buying, then you should continue to rent guilt free if you want to stay in California. There are many benefits to renting that often are not discussed, including the ability to avoid the inconveniences of homeownership like repairs and upkeep costs. It also gives you the flexibility to get up and leave at the end of your lease if you find a more appealing neighborhood.

As a renter, you can wait to buy when the market dips, or never buy and invest your extra funds to build your nest egg in a more diversified manner. The inability to buy a satisfactory home should not be your only reason for moving.

LA is big: While Hancock Park and the Pico-Robinson area may be too richly priced for many, the San Fernando Valley area may have houses that are far more affordable. While this won’t deal with the issue of high state income taxes, thinking outside the box from a housing perspective may make living in Los Angeles a bit more attainable.

Strong social network: You mentioned that you have family in LA. That should not be discounted. While they may not be helping you out financially, being surrounded by family who support you in non-financial ways should not be taken lightly. Having someone who can pick up your kids from school when you are in a bind or being able to easily spend time with parents, grandparents or cousins is invaluable.

Lifestyle choice: Typically, nice places are associated with a higher cost of living. While LA is expensive and has nosebleed high taxes, it also has a lot to offer. It has great weather, excellent kosher restaurants, robust centers of Torah learning, a diversified economy with many career opportunities, and fabulous hiking and other outdoorsy activities. There is no question that California has its challenges, but many residents will argue that these benefits are worth paying a premium for. This lifestyle choice may not be right for you, but for some people, it’s worth it.

Despite what may seem like my impassioned defense of Los Angeles, I have only been there as a visitor. I can appreciate a great dinner with friends at Pat’s on Pico, driving down the Pacific Coast Highway with my family, hiking Runyon Canyon at sunrise, and participating in a delicious kiddush at the Young Israel of Century City. However, I can’t pretend to fully understand the daily struggles of the average frum family there.

After serious introspection, if the financial challenges are just too much to bear, then it may be time to explore moving. Thankfully, in 2022, there is no shortage of great frum communities around the country from which to choose. Places like Las Vegas, Houston, Dallas and Miami already have amenities to satisfy a frum lifestyle, plus more affordable real estate and no state income tax to boot!

Readers are encouraged to ask their personal financial questions, which may be quoted from and addressed in a future column, by emailing [email protected].

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Jonathan I. Shenkman, AIF® is the President and Chief Investment Officer of ParkBridge Wealth Management. In this role he acts in a fiduciary capacity to help his clients achieve their financial goals. He publishes regularly in financial periodicals such as Barron’s, CNBC, Forbes, Kiplinger, and The Wall Street Journal. He also hosts numerous webinars on various wealth management topics. Jonathan lives in West Hempstead with his family. You can follow Jonathan on Twitter/YouTube/Instagram @JonathanOnMoney.