8 Ways to Afford Living in Los Angeles

You may or may not know, that Los Angeles is one of the most expensive places to live in California. Not much of a surprise being that it’s the home of major attractions such as Disneyland, Universal Studios, and Hollywood.

However, the annual income of $74,371 for people to be able to live comfortably in Los Angeles does not equal the minimum wage of $13-$14 an hour. 

Here are 8 ways to help you afford living in Los Angeles. 

1. Paying off your debt

   According to lendingtree.com, The average credit card debt per cardholder in the Los Angeles area is $6,975. And that is only for one card. Imagine having multiple credit cards where you owe more than $6,000…yikes!

   Paying off your debt can seem impossible. However, having debt on top of living expenses in one of the most expensive cities can make things even harder to survive. Most people only make minimum payments on their credit card debts, with interest rates compounding monthly. 

   In order to live comfortably in Los Angeles, you must pay off your debts as quickly as possible. If you feel like you are drowning in monthly debt payments, look into debt relief programs! Consider the following debt relief services: 

   • Debt management plans
   • Debt consolidation
   • Debt settlement
   • Credit counseling
   1. Create a list of all your monthly expenses
   2. Create a list of all your monthly income
   3. Come up with SMART financial goals so that you know the point of “WHY” you are budgeting
   4. Reorganize your monthly expense list in order from essential to non-essential
   5. Stick to your budget and reassess as things change

2. Create a budget

   Another way to stay on top of your monthly income/expenses is to create a budget. This is something you should reassess weekly/monthly as things may change often. There are many pros to creating a budget. A budget plan helps you see the full picture of what you make and where your money is going. 

   There are many ways to create a budget plan but here are a few steps we like to suggest,

   1. Create a list of all your monthly expenses
   2. Create a list of all your monthly income
   3. Come up with SMART financial goals so that you know the point of “WHY” you are budgeting
   4. Reorganize your monthly expense list in order from essential to non-essential
   5. Stick to your budget and reassess as things change

   Check out the 50/30/20 budgeting rule to help you budget better!

3. Create SMART financial goals

   SMART financial goals stand for Specific, Measurable, Achievable, Relevant, Timebound. Anyone can make a goal and hope that it happens. The reason why you should make SMART financial goals is that it is something you know is possible, something that you can make happen instead of something that you hope happens. 

   An example of a SMART financial goal includes,

   Paying off your debt

   Say you owe $5,000 in debt and your SMART goal is to pay it off within one year so that you can be debt-free. You are going to do this by not buying coffee at a coffee shop daily and only eating out only once a week. This will allow you to pay $500 a month towards your debt payments. 

   This goal is SMART because:

   • Specific: you owe $5,000 and want to pay it off in one year
   • Measurable: You will be able to pay $500 a month
   • Achievable: You are going to limit the number of times you buy coffee and eat out so that you can afford the $500 a month
   • Relevant: By wanting to become debt-free, this goal of paying off this debt is relevant
   • Timely: You gave yourself a time frame to complete this goal

4. Find ways to reduce your expenses

   One way to help yourself live comfortably in Los Angeles is to reduce your expenses. There are many ways you can do this. If you already live in Los Angeles you know that most places are within walking distance. According to essexapartmenthomes.com, Los Angeles city has a walking score of 90-100. They call this score “Walker’s Paradise.” This can help you save money on gas or parking permits.

   Another way to reduce your monthly expenses is to cut out some monthly nonessential subscriptions. A big subscription that may not be used all that much is the gym membership. A monthly gym membership can range anywhere from $20 dollars to $200 or more. One of the cool things about living in the Los Angeles area is that there are more than 100 scenic hiking trails according to the AllTrails app.

5. Start a side hustle to increase your income

   Most of the time, especially in today’s society, it can be hard to live solely on one income. According to The 2019 Financial Health of Los Angeles Residents on Urban.org, 61% of families living in Los Angeles reported being financially insecure. This was compared with the 52% of families reported nationally. 

   If you are struggling financially and living in the Los Angeles area, you may want to consider taking on a side hustle to help increase your income. 

   There are many sides hustles out there to choose from. A few examples include,

   • Rent out a room/driveway
   • Take online surveys
   • Pet sit or babysit
   • Freelance (look at your skills and figure out what you could offer other people)
   • Driving for uber or shopping for intuit

6. Make more, spend less

   One of the hardest things about making more money is the urge to spend more money. Creating a budget will help you figure out how much money should go to essential things such as bills, savings, emergency/retirement funds, college funds, etc. It will also help you figure out how much you should put into each area of your budget and then what you will have left over to free spend.

7. Create an emergency fund

   The Los Angeles area is well known for different disasters such as wildfires, floods, and earthquakes. Along with these disasters, the Covid-19 pandemic made things financially difficult for many people. These emergency events may not happen every day but some emergency events that do include:

   • Car breaking down
   • Losing your job
   • Car break-ins
   • Medical emergencies

   It is essential to create an emergency fund for any unexpected expense that may happen. It is hard enough trying to get by living in Los Angeles. Having an emergency fund will take a load off of the stress that builds up when an emergency happens.

8. Don’t live off borrowed money

   Many times the easiest option is to use your credit card. However, we often forget that the money we use on a credit card is not ours. Paying back a credit card can become difficult for most people as soon as they spend the money. 

   A study from lendingtree.com showed that the average credit score for Los Angeles residents was 689. This is due to the fact that many people have late payments when using their credit cards. Even just paying the minimum amount each month can affect your credit score. 

   Remember, if you do not have the money in your regular bank account you should not be using your credit card. 

   Check out how you can eliminate your debt and raise your credit score quickly!

Anyone can afford to live in Los Angeles

With these 8 simple steps, you can survive financially while living in the Los Angeles area. If you are struggling financially to survive in Los Angeles, don’t worry you are not alone. Being a small business located in Los Angeles and helping our local community, we understand firsthand what it takes to survive financially. 

If you are looking for a debt relief program, let’s chat today! Schedule your free consultation or speak to one of our LA experts so we can understand your situation and take the financial stress off of you.