Hawaii Living: The Paradise Tax

Our guide to Hawaii's high cost of living, also known as the paradise tax.

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Everything costs more here. That's just a simple fact of life. Well, maybe pineapples are cheaper, but often they aren't. Seems like everything costs money, even parking at the doctor's office requires a fee! It's a land that is filled with hidden costs. Let's cover the big costs so you can better understand how to budget for living in Hawaii.

Housing Costs

When you look at housing prices you have to look beyond just the rent or mortgage payment. You have to factor in insurance (home owners, renters, or condo owners) and possible home owners or condo association fees. Then there are property taxes and you'll certainly want utilities like water, sewer, trash pickup, and electricity. Have you done your research on those costs?


What about pet fees, cleaning fees, security deposits, and first and last month's rent payments? Are you factoring all of that in? Can you afford it?

If not, it's time to consider other options. Maybe shacking up with a roommate is a more financially sound plan. Maybe that condo complex with the amazing ocean views isn't as smart as the one with that's two miles inland and has parking lot views.

You really have to shop around because working to pay for housing costs isn't really living, it's surviving. Learn to live below your means which means spending less.

Utilities

Did you know our electric rates are over 3 times the national average? On Oahu, we pay over 35 cents for one kilowatt hour (vs 10-11 cents nationally). Just running a 60 watt lamp light bulb 24 hours a day for a month will cost you over $15. That's one light bulb! So don't forget to turn that lanai light off when you're not using it.

Add in many lights, a TV, a washer and dryer, and air conditioning and you may see electric bills that range from $300 to $800 per month. If it's a hot summer and you want AC you'll be paying for it with the higher end of that scale. This is why many suffer through a hot summer without AC, which isn't fun. 2015 is a great example of a hot year because of El Nino In Hawaii.


High electricity costs are also the reason that Hawaii is leading the nation in residential solar panel installations. Why pay the electric company when you can make your own electricity! Of course, if you're renting a place this won't help you any.

Food

Food items in stores here pretty much always cost more than on the mainland. In the case of perishable items (milk, cheese, meat, fruit, vegetables, etc) they're often quite a bit higher here.


So is milk really $9 a gallon? Sometimes it's more. Go to a mini-mart in some areas and you'll pay $7 for a half gallon. So you'll need to be smarter and find the deals in your area. Milk will be more expensive than the mainland, but it can be had for $5 per gallon or less. Expensive for milk but how much milk are you really drinking? Water is pretty tasty too!


The biggest secret to food deals in Hawaii is Costco. Find a Costco on your island of choice and things will be far more reasonable.

Think of the positive side, you'll certainly learn to buy less and waste far less!

Dining Out

As you can probably guess, dining out at a restaurant is pretty expensive here. The good news is that it doesn't have to always be expensive. The key is to avoid any type of resort areas because anything geared towards a tourist will cost more. Find those local neighborhood mom and pop restaurants, sandwich shops, and other places that are off the beaten path a bit. It's not only cheaper, but often better food and far more likely to be a memorable event.

Other Crazy Prices

Let's not forget about gas for your car, it's going to be higher here for sure. How much higher depends on many factors but figure 30-60 cents more per gallon. If you have a smaller car with a 15 gallon tank then we're talking about $4.50 to $9.00 more to fill it up. Got a gas guzzling monster SUV with a 25 gallon tank that you empty each week? Then budget another $7.50 to $15 per week to fill it up. Those prices are on top of what you'd pay on the mainland.


The cost of gas is just one reason to drive a smaller, more efficient car in Hawaii. Parking is the other reason, because parking lots and spots are generally smaller pretty much everywhere on the islands. Speaking of parking, you often have to pay to park as I mentioned at the beginning of this article. Many restaurants, stores, and even doctor's offices have parking lots you have to pay for. Insanity!

Even buying every day items like toothpaste, vitamins, and clothing often costs more here. The bottom line is that anything which has to be shipped here (which is just about everything) costs more due to those shipping costs. This shows how shopping locally is more important on a small island than it is in other parts of the world.

Conclusion

All of these extra costs factor into our paradise tax. It's that extra cost of living in a place like Hawaii. The key is to really shop around, use coupons and discounts, and let price matching and Amazon Prime become your good friends.

To learn how to cut costs be sure to read Living Below Your Means.
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