Cost of Living in Hawaii
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Considering a move to Hawaii? It’s beautiful here, surrounded by vast ocean, pristine weather and rich culture, but paradise comes at a cost – a cost so high, in fact, that it can be a deterrent for many folks. Here is everything you need to know about the cost of living in Hawaii, along with firsthand stories and opinions from local individuals and families.
In order to live comfortably in Hawaii, some studies show that you’ll need a whopping salary of over $122,000. (Of course, standards of living vary according to each person and it all depends on your level of “comfort.”) The Living Wage Calculator from the Massachusetts Institute of Technology (MIT) says that one adult in Honolulu needs to make $16.59 per hour for a living wage. If that is a couple with 2 children, each adult needs to make $17.70 per hour.
According to Payscale, the average salary in the island's capital, Honolulu, is $66,000, but the state has one of the highest income tax rates in the country, with its top tier at 11 percent. According to the Bureau of Labor Statistics, the average U.S. salary, as of the 3rd quarter in 2020, is $51,688 ($994 weekly). In another analysis by Indeed.com in January 2021, the average salary in Hawaii ranges from approximately $33,965 per year for Customer Service Representative to $96,620 per year for Travel Nurse.
But for many people, Honolulu’s appealing qualities balance out the potentially lower wages and high cost of living.
Renting in Hawaii is much more expensive than most places on the mainland – and it all depends on location. For example, a studio on Oahu can range from $1000 to more than $1,600 per month and that’s not including utilities, which can be around $150 per month for one person. A one-bedroom apartment or home can range from about $1500 to more than $2000 per month and a two-bedroom apartment or a house will start at $1,800 per month. Looking at a luxurious, new one-bedroom condo? Expect to fork out at least $3,000 a month.
You can always opt to live outside of Honolulu’s center or even consider the other Hawaiian Islands – the Big Island’s Hilo is nearly 49 to 56 percent lower than Honolulu, plus offers a laidback and relaxing small-town vibe that may be appealing than the hustle and bustle of the city.
If you’re looking to buy, the median sales price of a single-family home is $870,000 – a new record high, as of December 2020. The median sales price for a condo on Oahu is $455,000. Despite the high prices though, Oahu continues to see a growth in home and condo sales.
Alternatively, buying a piece of land and building your own home could be more affordable, but that depends on location and your general contractor. You can find the average costs associated with building your own home in Hawaii in this blog post.
When it comes to utilities, Hawaii’s residents pay the most when it comes to monthly energy bills in the nation. According to the U.S. Energy Information Administration, you can expect to receive the energy bill at an average of $168.13 per month. That’s $50.48 more expensive than the national average of $117.65.
Despite the high cost of energy, the sun shines in Hawaii at a rate of 8% more than other states, creating an opportunity for cost effective solar energy. In fact, Hawaii was the first state to set a deadline for generating 100% of its electricity from renewable sources by 2045.
Let’s say you do choose to live outside of the busy Honolulu or downtown area – you’ll then need to consider the cost of owning and driving a vehicle. Gas prices as of January 2021 is about $3.16 per gallon in Honolulu. Taking the bus or, in Oahu, TheBus, may be a more affordable method of transportation, at $2.75 per ticket, although it may not be an appealing daily commute of choice.
If you work in downtown Honolulu or Waikiki, you’ll most likely need to rent a parking spot in the case your company doesn’t provide one. Parking ranges typically from $100 to $200. Those who live in a condo may also need to rent a stall at around the same price, although it depends on association rules.
If you live in Kapolei or on the ‘Ewa side of Oahu, you might be able to take the Honolulu Rail Transit to work. However, there have been many delays with its construction; read more here.
Groceries and Dining Out
and locally grown coffee. But Hawaii is the most expensive place to buy groceries in the nation, especially because products are shipped from the mainland. According to a 2020 Quarter 3 report by the Missouri Economic Research and Information Center, Hawaii’s groceries are incredibly steep. The study used a national index of 100 and Hawaii ranked at 196.3, while comparatively California ranked at 138.5, Washington at 111.3 and Oregon at 134.6.
For example, a gallon of whole milk on Oahu can be $8.99 – the cheapest at Costco for around $5.50 a gallon. Broccoli is at $3.79 a pound, bulk carrots at $3.49 a pound. And yes, while buying local is encouraged, the cost of Hawaii grown mangos are at about $6.99 a pound. Four rolls of toilet paper will be about $6.
Eating out will add up quickly. The average cost of breakfast in Hawaii is $8 to $12, lunch at about $8 to $15 and dinner will cost $15 to $30 (or more). There’s a huge price range though, so many people will buy a plate lunch (white rice, mac salad, and meat entrée like loco moco or teriyaki beef) and save it for lunch and dinner, or split the entire plate in half with a friend.
Ready for some good news? Hawaii’s average property tax rate is 0.35 percent, one of the lowest rates in the nation. Income tax rates range from 1.4 percent to 11 percent.
For retirees, Hawaii can be fairly appealing as the state exempts Social Security retirement benefits and public pension income from state taxes. It fully taxes income from private pensions and retirement savings accounts.
According to a study by Commonwealth Fund, Hawaii residents who participate in employer-sponsored health coverage plans pay some of the nation’s lowest costs. Typically, insurance in Hawaii is provided through two main companies: Kaiser Foundation Health Plan Inc. or the Hawaii Medical Service Association (HMSA). The potential cost according to this study to employees in Hawaii is about 36 percent of the national average at $4,664 (8 percent of median income) versus a national cost of $7,240 in the nation (12 percent of median income). Hawaii had the lowest employee costs for single coverage in the nation in 2017 at $675, which was less than half of the national average of $1,415.
More good news: Hawaii is also the healthiest state in the nation and has been named healthiest nine times since 1990. Low obesity and smoking rates can be contributed to low levels of air pollution, less mental stress and a good number of available primary care physicians.
An example of a budget for a family of 4 living in a Single Family Home:
- Mortgage - $2,900 per month
- Groceries - $800 to $1,000 per month
- Electricity - $190 per month
- Transportation - $380 per month
- Dining out - $500 per month
- Property Taxes - $2,350 per year
The numbers above are based on the following conditions:
- You have 1 Wall AC Unit that you use sparingly.
- You have 2 gas cars.
- Shop at Costco, Foodland, and/or Safeway.
- You dine out once to twice a week at a reasonably priced restaurant.
- You live relatively close to where you work.
Ways to Save
- Shop at Costco. If you or your family is in there military, shop at NEX.
- Costco offers the cheapest gas in Hawaii.
- Electric vehicles (EVs) have become popular in Hawaii. Incentives are provided for EV owners including free street parking and HOV Lane use.
- Solar Panels - Hawaiian Electric Company offers several programs to customers to save big on electricity.
So, why the high cost?
The high cost of living in Hawaii has many reasons, but the short answer is the fact that we’re surrounded by water. Nearly everything we consume has to be shipped here or flown. Hawaii is also a desirable place for the rich to buy property, which continues to drive up housing costs. Another big factor: utility bills such as electricity is sky high, thanks to the warm climate. Like with many things in life, there is certainly a trade-off.
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Is it worth it? Here’s what locals are saying…
“Mainland home prices are tempting, especially when we see prices rising here in Hawaii every year. But for me, Hawaii is home. It feels like family. I make it work by living in a condo instead of a home. I shop in bulk at Costco instead of other grocery stores because Costco has some of the cheapest grocery prices here. I also keep an eye out on sales…it’s just how things are,” says L.M.
“I’ve given thought to moving to the mainland where the cost of living is so much lower, but it’s hard to imagine moving and having to start all over. My roots are in Hawaii, and my family is here. I make it work by living with my parents, which saves a huge amount of money I would normally spend on rent,” says C.O.
“The cost of living in Honolulu is tough. My wife and I have talked about moving to the mainland but every time we have this discussion, we both just can’t imagine moving. Even though it can be difficult to make ends meet, we make it work. We buy in bulk and my wife watches our two kids at home, saving on daycare. She also works from home and every bit of income helps. We look for sales in stores like Costco and Target, and buy secondhand toys off Facebook Marketplace or E-bay. We don’t eat out much, we cook every day and keep a pretty strict budget every month,” says K.K.
“I moved to Los Angeles about six years ago for a new job and that wasn’t too much different from Hawaii in terms of cost of living. This year, I’m in Minnesota. There’s no tax on clothing or food and a four-bedroom home sells for $200,000. It’s just like that old saying – it’s just the cost of living in paradise. I was just offered a high-paying job in the summer, but even though it was a good salary, I would have to move back into an apartment and cut down significantly on my standard of living,” says J.G.
“I moved to San Francisco about five years ago. I’ve run into a lot of people from Hawaii out here and all of us have similar stories. We’ve come for jobs, school or opportunities. Aside from the housing which is on par with Hawaii, living expenses are cheaper. Jobs pay better and there’s more of them. And while we no longer live in paradise, I can now afford to visit whenever I want. I do miss Hawaii a lot, but right now it doesn’t make sense to move back,” says J.D.
Hawaii vs. Other Places
Living in Hawaii vs. California
Living in Hawaii vs. New York City
Living in Hawaii vs. Colorado
Living in Hawaii vs. Washington
Living in Hawaii vs. Alaska
While the above calculations provide a rough estimate of living in these locations and exclude the cost of health insurance and expenses, we can come to a few conclusions:
- Hawaii has one of the lowest percentages of property taxes in the country.
- The cost of food is high in Hawaii compared to other locations.
- Some places, like California and New York, have higher expenses in the area of transportation. Parking fees are exorbitant in New York if you own a car, but this could be eliminated by using their great public transportation system.
- In Honolulu, you do not have to pay extra for garbage or recycling services, unlike most places.
- It is more expensive to live in some locations, like Seattle, Manhattan, San Francisco, and San Diego than in Honolulu; however, all of these locations also have a higher average income.
While the cost of living in Hawaii may be daunting at first, it requires a bit of soul searching and close look at your lifestyle. If you’re used to a certain standard of living, you may need to make a few sacrifices when moving to Hawaii. But, it may not seem like a sacrifice to nix that luxury car or to eat out less, especially if living near the ocean, enjoying a warm climate and healthy island environment are important to you. It’s all about balancing your values and discovering what works for you and your family.