How to justify housing costs in California?!

[mlm808it]

Hey guys,

I currently live in Hawaii (military) and I'm getting out of the service soon and moving back to California. (We have lived there before in the Camarillo/Ventura area.) Right now me and my wife are saving 50-60% of our net income and would like to keep that percentage at a minimum. The reason we are able to do this is because our housing/util are free in the military. So NET income right now is $4800/mo between the both of us. With our credentials and experience I see no problem for us to make $75-85k EACH when we move back to California, provided we are able to work in the city (Los Angeles/San Diego or something of that nature.) We both love Southern California and don't really want to move north, plus I have the surfer beachy lifestyle.

So I guess the question is: If I have to work in the city to receive high wages, where can we rent or buy to keep our mustachian lifestyle of saving minimum 50% of our net income, probably closer to 60%? We would probably be netting ~$10k/mo. I know this sounds like an easy answer but I was reading one of the polls and most of us only pay <20% of our net incomes to rent which for us would mean $2k/month. $2k/mo for housing in California near a large city that provides decent wages and ample job opportunity?! (Before most of you yell at me, we have a toddler and my wife refuses to live in a high rise apartment because of this, so single family home is what would keep her happy). It seems impossible to find a decent 2bd home for $2k that isn't in like.. Compton or something. Does being in California justify sending a higher amount than 20% net income on rent?

Any advice would be appreciated. Thank you. And sorry I'm not a very good writer (hence why I haven't started a very successful blog business hehe).

[mlm808it]

Also, the only reason I specify California is because my wife's family lives there and can help with our toddler, and my career is in IT, in which California seems to be a good hub for.

[okits]

I am guessing you're referring to this poll, which is for gross income.  That changes the numbers a little.  $75-85k X 2 = $150-170k per year, which is $2500-2833 a month if you're aiming for 20%. 

As far as justifying the cost, I think you've answered your own question:

(Before most of you yell at me, we have a toddler and my wife refuses to live in a high rise apartment because of this, so single family home is what would keep her happy).

Also, the only reason I specify California is because my wife's family lives there and can help with our toddler, and my career is in IT, in which California seems to be a good hub for.

There's no magical source of inexpensive housing just because you're wishing for it.  You're trading off cost vs. location, size, luxuriousness.  Decide as a family what's worth paying for (at the expense of saving and investing more), being mindful that saving 50% of $100k household income and 33% of $150k household income are the same thing (it's not just the rate of savings that matters).  If you earn enough extra in a HCOLA then expensive rent may be worth it.

[forummm]

I think renting is cheaper than buying in many hot areas of CA now.

Run the numbers for the specific places in CA you might land (and expected costs and salaries--look at actual apartment listings, etc) and compare them to places you would go besides CA. How do they match up? Look at the info and then make a decision. It's your life. You're allowed to make financial tradeoffs for quality of life. And if you can still save 50% of your income living in CA, that's pretty great.