California Reality Check
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About California Reality Check Website

This website is designed to help students learn how much money they will need to earn in order to have the kind of lifestyle they may want in the near future. A student may want to live a simple non-materialistic life or one in which they have a house, an automobile and the latest high tech gadgets.

The website is meant to be done in a linear fashion. You will first select a city to live in and then select essential necessities such as: Housing, Utilities, Food, Transportatio and Health Care. Then you will pay yourself in the form of Savings; this is followed by non-essential items: Entertainment, Personal Care, Miscellaneous and finally Debt (Student Educational Debt or Credit Card Debt). A total of all expenses is then provided. The goal is to find careers that pay the annual salary needed to cover your expenses.

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Selecting A City

Why do you have to select a city? Choosing a city will give you more detailed information for that area and will allow you to compare costs between different geographical locations. There are several California cities to choose from and include small and large locations from all over the state. Simply click on the city of your choice and you will move to the next section.

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Choosing Housing

A huge part of becoming an adult is being able to live on your own and support yourself. One of the biggest monthly costs most people encounter is that of housing. There are several options to choose from including low and high cost apartment living as well as home ownership. Although there are other options, such as purchasing a manufactured home or renting a house the choices listed should give you a good understanding of housing costs in the area you select. The data for housing comes from two sources:

For Efficiency, 1 Bedroom and 2 Bedroom Apartment Rents we use HUD 50th Percentile Rent Data.

For House data we use www.zillow.com. We use their Median List Price calculated over a year. We then use BankRate.com to determine a 30 year mortgage at 5%.

You may find the cost of a house is less than renting an apartment in some cities. This is due to the housing crisis that has affected much of the nation since 2008. Housing prices in most cities have been drastically affected by a 30% to 50% price drop while only a few cities experienced a price increase.

Housing prices fluctuate. Currently prices are low, but eventually prices will increase. Some cities have experienced extreme housing price reductions and it may be a good time to purchase a house, before prices rise again.

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Utilities Section

Many times young adults are not aware of the cost of utilities on a monthly basis; however, in order to have a functioning home, utilities are required. Electricity is essential in order to use any appliance in the home. Other utilities such as Internet access, cable TV are optional and can be selected or skipped. You decide if you want a land line telephone and a mobile phone or neither.

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Food Section

Obviously, everyone needs to eat and people have many choices of what to eat. We have narrowed down the many possible food options into groups that are separated by either eating in, eating out or a combination thereof. The budget exercise will give you an idea of typical food costs for a sample month.

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Transportation Options

Getting to and from work will be a challenge without transportation. One solution is to move near your place of employment. Most people, though, either use public transportation such as a bus (if available in the city you select) or purchase a vehicle.  

The options listed may not have the auto you prefer; however, select the vehicle that you like the most from the list provided. When purchasing an auto, other items should be taken into consideration, such as insurance, fuel, and maintenance. So, although, you may be able to afford the monthly car payment, you may not be able to handle the additional costs.  

Below is the information for each vehicle listed.  If you would like to find out the cost of a different car or truck model, visit edmunds.com.

The information for the average cost for each vehicle was derived using Edmunds.com's True Cost to Own(TM) (TCO), a proprietary tool that helps estimate the total five-year cost of buying and owning a vehicle - including items most individuals do not take into consideration.

Note that actual costs of owning a particular vehicle will vary depending on personal circumstances, such as driving history and the number of miles driven.

However, the costs listed include vehicle cost, interest on financing, taxes and fees, insurance premiums, fuel, maintenance and repairs. In order to estimate certain mileage-dependent costs, an assumption was made that vehicles are driven an average of 15,000 miles per year. For used vehicles, mileage was calculated using the nominal difference between the current calendar year and the vehicle's model year.

Edmund's True Cost to Own(TM) calculations use the following set of assumptions:

... Ownership expenses are considered over a five-year time span

... Individuals will drive an average of 15,000 miles per year

... Individuals are financing the vehicle using traditional financing, not lease financing

... Individuals are in the Gold credit tier for the purpose of determining your finance rate

... Individuals are putting a 10% down payment on the vehicle at purchase

... The retail contract term is 60 months

... Individuals represent the average demographic for insurance rate consideration  

Average monthly cost for each type of auto (basic, regular, luxury and used) is the result of averaging the 5 year total cost of a vehicle. 

Vehicle Price

The purchase price listed is from Edmunds.com vehicle's True Market Value® price (including typical equipment option package and destination charge) less any widely available customer cash rebates. The purchase price employed for used cars is the vehicle's Private Party True Market Value® price. The resale value assumes the vehicle will be in "clean" condition, will be driven an average of 15,000 miles per year, and will be sold to a private party. 

Insurance

This is the estimated average annual insurance premium being charged by insurers in your state. The premium has been determined based on industry-wide, state-by-state data from the National Association of Insurance Commissioners (NAIC)* for all makes, models, drivers, usage/mileage, etc. for the major coverages (liability, comprehensive and collision), and vehicle-specific rating data from one of the country's largest insurance companies.

While this information is specific to vehicle make, model, model year and body type, your personal information is not taken into consideration and could greatly alter the actual premium quoted by an insurer. Factors that will affect your rate include your age, marital status, credit history, driving record, and the garaging address of your vehicle.

* Data from the NAIC's most recently available Average Auto Expenditure and Premium report has been used in this calculation. The NAIC does not endorse or support any analysis or conclusions based upon the use of this data.

Financing

This is the interest expense on a loan in the amount of the True Market Value® purchase price (including typical equipment) plus the destination charge (for new cars) and the base sales tax and initial fees for your state, assuming a 10% down payment and a loan term of 60 months. The interest rate used is the prevailing rate that banks and other direct automotive lenders are charging consumers in your geographic region who are in the Gold credit tier (which encompasses the majority of the car-buying population) of the Edmunds.com Finance Rate Estimator.

Note: Even if you do not finance your vehicle, the inclusion of financing cost in determining True Cost to Own is still appropriate because it reflects the "opportunity cost" of the return you could have made if you had invested the Purchase Price elsewhere.

Taxes & Fees

Sometimes referred to as DMV fees, this consists of the base sales taxes, license and registration fees in your state, and gas guzzler tax if applicable. These taxes and fees are frequently based on a percentage of the purchase price, and generally decrease as the vehicle ages and loses its value. Note that the average state sales tax that we use includes local and county taxes.

Fuel

This expense is based on EPA mileage figures, assuming consumption consists of two-thirds highway and one-third city driving, and that the vehicle has an automatic transmission unless automatic is not available. Cost estimates are based on self-service prices, using an average mix of two-thirds regular grade and one-third mid-grade gasoline.

Maintenance

This is the estimated expense of two types of maintenance: scheduled and unscheduled. Scheduled maintenance is the performance of factory-recommended items at periodic mileage and/or calendar intervals. Unscheduled maintenance includes wheel alignment and the replacement of items such as the battery, brakes, headlamps, hoses, exhaust system parts, taillight/turn signal bulbs, tires and wiper blades/inserts. Estimated tire replacement costs are supplied to Edmunds.com by The Tire Rack, Inc.

Repairs

This is the estimated expense for repairs not covered by the vehicle manufacturer's warranties over the five years from the date of purchase, assuming an average of 15,000 miles are driven annually.

If you would like to find out the cost of a different car or truck model, visit edmunds.com.

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Clothes Section

Clothing is another item that everyone will need to purchase at one time or another. The options shown may not be the style of clothing you prefer; however, these are just sample pictures. Select the items that you like the most from the samples provided or ones that cost about the same as items you like.

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Health Care Options

The majority of employers tend to pay for an employee's health care; however, with costs skyrocketing, this may change in 5-10 years. If you conduct some research, you can easily find out if the career you will be pursuing is one where employers do or do not pay for health benefits. If you are not sure then select one of the non-employer paid health care costs. These costs are for a specified number of visits and are then divided over a 12 month period.

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Entertainment Section

This one is easy. Simply select how much you will spend on entertainment.

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Personal Care Section

The options listed should give you an idea of the things you will need to maintain your business, social and personal relationships. Some of the options may or may not apply to you, so simply select ones that you think you will be using.

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Miscellaneous

These are everyday and big-ticket items that most people purchase throughout the year. Typically you will not be able to pay for them right away and may need to use a credit card or some other deferred payment method. Select either the option you like or one that is closest in cost to something you would like to purchase.

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Savings Plan

Saving money or is like paying yourself. Saving money allows you to keep some of your hard earned cash instead of spending it all every month. How much should you save each month? The more you save the better. However, if 2% is all you can afford, then 2% will better than nothing. Just realize that 2% may not be enough for a future emergency. Click on the links below to get more information on saving money.

Google Search: Savings Calculator

http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx

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Final Total Page

FINALLY! You are done buying all your stuff and now it is time to find out the total. On this page all the monthly items are multiplied by 12 months and this provides you with your total yearly expenses, After government taxes are added you then get your final, final total. The amount listed is how much money you would have to earn in order to pay for the kind of lifestyle you just selected. Now it is time to find a career that will pay you close to this amount. Simply click on the Find Career button and you will be on your way.

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Where did the data come from?

The data amounts come from various sources. Use the Input Form above to contact California Reality Check for a complete list of all data sources.

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