Why Are People Leaving California?

I've been noticing plenty of news articles about people leaving California, which where I live with my family. Some of the new locations I hear about include Nevada, Washington and Texas- all with no state income tax. 

Just this month I've spoken to several people working in stores, banks and attending kid's soccer games about leaving California. Yes, there are plenty of valid reasons to be annoyed with the state of California. 

Of the people I've spoken to, there seem to be several similar themes related to finances:

(i) "I can rent or buy a house much cheaper elsewhere."

(ii) "I'm tired of paying California's state income tax"

(iii) "Gas prices are too high," etc. 

All of these are valid reasons to be annoyed with living in the Golden State- California. Yes, housing costs are inflated, especially on the coastal areas of the larger cities. No one likes paying higher taxes and gasoline prices when you hear about other states where the taxes and prices are lower. However, there are other circumstances that you should consider before packing up your life and moving to another state. 

Friends, Family and Familiarity:

If you are going to make the move to another state, make sure you understand how you are going to build new relationships and/or maintain your existing relationships with friends and family living hundreds of miles away. I recently spoke to a friend who relocated from the coast of southern California to the foothills of Northern California. 

As the primary bread winner, her move was prompted by a new, higher paying job offer, and the new area came with better housing prices than the coast, which allowed her to purchase a much larger house. However, this friend and her family had not yet found her tribe- her group of people that she and her family felt comfortable being around after nearly three years. She said she simply didn't fit in with the people there. As a result, the new job and larger house have lost their luster- so my friend and her family will be moving back to the southern California coast once a new job is solidified. 

It could be related to age, or not, but I get the sense that making new connections with people after your kids are on their own is just more difficult than when they are in little league, travel soccer during the K-12 school years - as each of these activities create plenty of opportunities to socialize and discuss topics with other parents who often dealing with similar child rearing challenges.

Weather & Health:

I have another friend who was so annoyed with paying California taxes he crafted a way to live six months in Nevada, then six months in his California home each year- thereby maintaining Nevada residency and avoiding the California state income tax. 

His first years were rough, as mandated residency requirements, and weather and air differences in the two states made the pre-retirement transition very difficult for his family. In turns out that his wife simply hated the Nevada location and specifically the weather- She dreaded returning to Nevada each year.


Yes, there were tax savings, but at what cost. The inconvenience of the forced moves proved to be too much work and adjustment. The Nevada house was sold, and my friend went back to being a full time California resident.

Gas Prices:

There is one solution that can solve your concern with gas prices, but it may cost you depending on how you proceed. If you are tired of putting expensive 91 octane in your fuel tank, there is way to completely eliminate the high cost of gasoline- buy used 100% electric vehicles for your family. 

Used EV's are very inexpensive to purchase, insure, maintain and charge. In my state EV's include a carpool/HOV sticker, so you will save time on your daily commute. One challenge with buying a used but cheaper EV is that your mile range will be limited. For trips that exceed your car's mileage you'll need to get comfortable with the charging networks along your trip route. 

Alternatively, for longer mile weekend trips I recommend simply renting a gasoline car. In my area you can rent a small SUV from a national car rental chain for around $40 dollars a day. This way you keep your EV for daily commuting, and then use someone else's gasoline car for longer trips. The point here- someone else will pay to maintain the gasoline engine car. 

Before you move:

If you are going to take the plunge on the California exit, much sure to consider the following:

-If you sell your house in California, it may be difficult to return if the house in your new location does not appreciate at the same rate as California. Put another way, your exit from California could be a one-way move only. 

-Renting your California residence for a few years could be great way to test the waters before committing to a new state.

-Make sure you understand the population and culture of the new state. How are previous California residents received? Is there a similar community, religious and/or business structure to your California location. 

-What is the state of your in-laws/parent's health and well-being? 

-Lastly, if money was no object, where would live? If California exit is purely financial, have you done everything in your power to make your current California dream a reality?

Financial Sombrero

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