Cost of Living in Hawaii: What You Need to Know (2023)

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The Hawaiian islands conjure images of endless beaches, clear water, and tropical forests. They are a popular destination for escaping the mainland United States to spend a few days (or weeks) under the sun. However, living in Hawaii is a different story. It frequently tops lists as the most expensive state to live in, which places financial stress on residents. The limited space drives up land prices while everything from groceries to gas needs to be imported, which means everything has a higher cost.  

How expensive is Hawaii, anyway? What do you need to earn to live there comfortably? Learn more about the cost of living in Hawaii so you can set a reasonable budget. 

What is the average cost of living in Hawaii? 

The first step when calculating your Hawaii cost of living is to see what income you need to thrive on one of these tropical islands. This will give you a base number that you can divide across your housing, utilities, transportation, and food costs. 

Experts vary in their estimates for how much you need to live comfortably in Hawaii. Some people believe you need to earn more than $200,000 per year to feel financially comfortable. The U.S. Department of Housing and Urban Development (HUD) says that any salary less than $93,000 is considered low-income for the state. However, according to the U.S. Census Bureau, the median household income in Hawaii is only $80,000, which is nearly double the United States national average of $48,672.  

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Another useful source to consider is the MIT Living Wage Calculator, which estimates the living wage based on factors like the number of children you have and the number of working adults in your household. This group estimates that a single working adult without children would need an average salary of $47,339 per year to live comfortably. This jumps up to a living wage of $93,852 for a single working adult with one child. 

There are a lot of numbers involved here, but they all point to one conclusion: Hawaii’s cost of living is high. As you map out your necessary expenses, you will start to gain a clear understanding of how much money you need to live.

Housing Costs in Hawaii Compared to the National Average

Housing costs are one of the biggest expenses for almost any personal budget. Most experts recommend allocating 30% of your income to housing, but some people spend more than 50% of their paychecks on rent and mortgage payments. 

Your cost of living in Hawaii will vary depending on the island you live on. If you want to live in a popular area like Oahu island, you can expect the average home price to increase – especially if you want to live near the beach. However, if you look for lesser-known areas, you might be able to secure housing at a more affordable price. 

As of Q1 of 2022, the median home price in the United States was $428,700. In Hawaii, the median home price was $1.04 million. In Honolulu county, the average single-family home price was $1.15 million for a single-family house and $515,500 for a condo. The average rent in Hawaii is around $1,630 for a one-bedroom apartment and $2,180 for a two-bedroom apartment. 

You can see how expensive housing is in Hawaii compared to the rest of the United States by looking at the conforming loan limit map by the Federal Housing Finance Agency (FHFA). This sets the limit for home loan values by county. In the vast majority of counties, the maximum loan that borrowers can secure is $726,200. However, in the entire state of Hawaii, the maximum loan limit is nearly $1.09 million. This highlights how it’s not unreasonable for someone to need a million-dollar mortgage in order to secure housing. 

What other factors contribute to the cost of living in Hawaii?

Once you factor in your rent or mortgage costs, you can move forward with planning other monthly expenses. Here are a few common expenses that most people take on to give you a high-level idea of your bills. 

• Expect to pay around $410 for your monthly energy bills, which include electricity, water, internet, and other utility bills you accrue. 
• Gas prices are usually $4-5 per gallon in Hawaii but they will fluctuate over time. You can check the AAA website to learn how gas prices vary from island to island. 
• Public transportation is an option on some islands. Oahu offers an $80 per month bus pass that covers most of the island. A bus pass, along with a ride-share budget, could be a good alternative to importing a car. 
• The high cost of food can eat into your grocery and restaurant budget. While tropical fruits are affordable, anything that needs to be important is expensive. Grocery prices are 53% higher than the national average. 
• Don’t forget to budget for entertainment. Set aside a few hundred dollars each month for outdoor adventures, excursions to other islands, and parking in different cities. Hawaii is a wonderful state to explore while you live there.

Your expenses will vary based on where you live, but you can expect higher prices in popular tourist areas like downtown Honolulu, Waikiki beach, Maui, and parts of the Big Island. 

Hawaii Cost of Living as a Parent 

Hawaii can be a wonderful place for kids to grow up. You can spend weekends exploring the national parks as a family and learning more about the local culture. However, parents need to be prepared to adjust their cost of living expectations around their kids – especially for infants and toddlers who need daycare. Here are a few statistics you need to know: 

• The Hawaiian islands rank 12th out of 50 states for the most expensive infant care. 
• On average, parents pay $13,000 per year (roughly $1,080 per month) on early-age care. 
• As your kids get older, these costs decrease. The average daycare costs for a four-year-old are $9,000 annually ($750 per month). 
• Hawaii is one of 33 states where infant care is more expensive than college. 
• Parents can expect to pay $4,000 more per year on daycare than in-state tuition at a public university.

There are public daycare options available and programs to help parents with daycare costs. Then, once your kids are ready for Kindergarten, you can register them to attend your nearby public school. There are plenty of public school options on each island that you can compare as you look at houses. 

You also have the option of sending your kids to private school. The average tuition cost for private education in Hawaii is $14,364 per year for elementary school and $17,502 per year for high school. The most expensive private school in the state is Hawaii Preparatory Academy in Waimea, with an annual tuition of $55,000 per year.

Why are the Hawaiian Islands so expensive?  

There are a few obvious reasons why the cost of living in Hawaii is so high compared to the national average. However, there are some lesser-known factors that will impact your finances. The first thing to consider is housing. Hawaii is the fourth-smallest state in the country, only bigger than Rhode Island, Delaware, and Connecticut. There is a limited amount of land to build on, and it’s not like residents could live in another state and drive into Hawaii like they commute on the mainland.

However, local regulations also limit how much land can be developed. The residents and government officials of Hawaii want to preserve the natural wonders that attract so many people to this state. If Hawaii no longer has endless beaches, lush jungles, and striking mountains, it also won’t have a tourist economy. However, it also creates a high cost for home prices.    

Hawaii is also expensive because of how much needs to be imported. Gas, cars, Amazon orders, basic food items not grown on the island, and various other essentials all need to be shipped from the mainland. These costs add up. A five-pound bag of sugar will cost you double in Hawaii than in other cities in the United States. Your financial planning needs to account for these small costs.

Hawaii is also costly because of its tax rate. Residents lose 11% of their paychecks to personal income tax, which is the second highest rate behind California (13.3%). Even if you find a job that pays more than $93,000 per year, a large part of those earnings will go to state taxes.

Find a Realtor in Hawaii

If you are ready to take the first steps to move to Hawaii, find an experienced Realtor who can work with your budget. Hawaii-based realtors are highly competitive because they need to fight to earn the best houses for their clients. By hiring one of the top real estate agents on your desired island, you can make competitive offers that get your bids accepted. 

To find a Realtor use our services at FastExpert. We can recommend vetted, experienced agents who have a proven track record of success. Choose the #1 trusted platform to search, compare and hire the best agent for your needs. Use FastExpert today.