How Much Should Cost of Living Be?

Relocating to another country introduces a wide range of financial challenges, many of which revolve around one central question: How much will it cost to live there?

For expatriates, accurately estimating and managing the cost of living is essential—not only to maintain financial stability but also to avoid lifestyle mismatches, unexpected expenses, and savings shortfalls.

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The cost of living varies dramatically across regions and lifestyles. Some expats relocate with employer-sponsored packages that cover housing, education, and transportation, while others move independently and must account for every detail themselves.

Even within the same country, costs can vary based on city, district, and personal preferences. Misjudging these expenses can lead to rapid budget overruns or a compromised quality of life.

What is Cost of Living?

Cost of living refers to the total amount of money required to maintain a specific lifestyle in a given location, or how much of your income should go to cost of living expenses.

For expatriates, this calculation becomes more complex due to factors like currency exchange rates, access to international services, tax regimes, and the availability (or cost) of familiar goods and services from one’s home country.

How Much Should Cost of Living Be For Expats?

The ranges provided reflect typical monthly estimates for single individuals and couples in moderate- to high-cost urban centers.

💰 Housing

Housing is often the largest and most variable expense in an expat budget. Costs depend on city, neighborhood, size, and whether you rent furnished or unfurnished.

• Short-term stays (1–3 months) tend to cost more due to the flexibility premium and furnished listings on platforms like Airbnb.
• Long-term leases offer better rates but may require multiple months’ deposit and local guarantors.
• Utilities (electricity, water, gas, internet) can add a significant amount, especially in hotter or colder climates with high energy consumption.

In major global cities like New York, Singapore, or London, housing can exceed $3,000/month for modest apartments.

In smaller Southeast Asian or Eastern European cities, it’s possible to find safe, central rentals for $400–$800/month.

💰 Food and Groceries

Food costs vary by:

• Eating habits: Regular dining out in major capital cities can easily cost hundreds per meal, while street food or local restaurants may charge only 1/10 of that.
• Grocery shopping: Cooking at home usually reduces expenses. Imported goods, however, often carry steep markups—sometimes 50–100% more than local brands.

💰 Transportation

Transportation costs are shaped by how much you rely on:

• Public transit: Subways, buses, and trams cost $1–$3 per ride in most cities. A monthly transport pass usually ranges from $30–$130.
• Car ownership: Includes fuel, maintenance, registration, and insurance. In car-dependent regions, this could total $300–$600/month.
• Rideshare apps: Uber, Grab, or Bolt usage can vary wildly—from $5 daily in low-cost cities to $20+ per trip in more expensive areas.

Many expats in walkable or transit-friendly cities forgo a car entirely and rely on mixed transport options for under $100/month.

💰 Utilities and Connectivity

Basic utilities (electricity, water, garbage, Internet) typically cost:

• $50–$300/month for 85m² apartments, depending on air conditioning, heating, and local energy prices.
• Internet is widely available in most urban centers for $20–$60/month.
• Mobile data plans vary from $10/month (SIM-only prepaid) to $50+ for unlimited postpaid plans with international calling.

Connectivity may be cheaper than in home countries, especially in Southeast Asia or Eastern Europe, but less reliable in some emerging markets.

💰 Healthcare and Insurance

Healthcare access and costs depend heavily on local systems and personal insurance coverage:

• In countries with universal healthcare, out-of-pocket costs can be low or nonexistent.
• In privatized systems (e.g., UAE, the United States), expats are often required to purchase international health insurance, which may range from $100–$300/month per person for comprehensive coverage.
• Consultations in private clinics (without insurance) may cost $30–$100, while hospital visits can reach several hundred dollars.

Even in affordable healthcare markets like Thailand or Mexico, emergency care can be expensive without proper insurance.

💰 Leisure, Travel, and Social Life

Lifestyle choices can dramatically affect your budget:

• Dining out, weekend trips, gym memberships, spa visits, or nightlife can quickly add up in urban centers.
• Budget travelers may spend $50–$100/month on local excursions, while frequent flyers or socialites might spend several hundred or thousand dollars on restaurants, shows, or flights back home.
• Gym memberships range from $30–$100/month, while niche fitness studios (e.g., CrossFit, Pilates) may cost more.

💰 Visas, Residency, and Legal Costs

Visa and residency costs depend on the country and your status:

• Tourist visas may be free or cost $30–$100.
• Digital nomad visas, work permits, or long-term residency applications can involve one-time or annual fees ranging from $200–$1,000+, especially if using a relocation agency.
• Additional legal expenses may include document translation, apostilles, notary services, or legal representation.

It’s important to account for renewal costs, particularly in countries requiring frequent visa runs or extensions.

In total, an average single expat can expect a monthly cost of living between $1,000 and $3,000, depending on the destination and lifestyle.

For couples or families, this can rise to $3,000–$7,000/month or more to take into account childcare and education costs.

The key to budgeting effectively is understanding which categories are fixed, which are flexible, and where your personal habits or preferences fall on the spectrum.

How to Estimate Cost of Living

There is no universal figure for how much your cost of living should be. Instead, it must be calculated based on your income, personal lifestyle, location, financial goals, and risk tolerance.

Online Cost of Living Calculators and Indices

Cost-of-living calculators and global indexes can provide a starting point:

• Numbeo, Wise, and Mercer’s Cost of Living Index offer city-level data on housing, groceries, transport, and more.
• These tools allow comparison between your current location and potential destination, helping assess if you’ll need to upscale or downscale spending.
• Look for median prices, not just averages, to avoid distortion by luxury pricing or tourist hotspots.

While these resources offer useful estimates, they often omit key variables like visa costs, international schooling, or insurance. They should supplement, not replace, personal budgeting.

Income-Based Budgeting Approaches

Aligning your living costs with your net income ensures sustainability. Several budgeting frameworks can be adapted for expat life:

📌 The 50/30/20 Rule (Adapted for Expats)

Traditionally:

• 50% on needs (rent, groceries, healthcare)
• 30% on wants (travel, dining, entertainment)
• 20% on savings or debt repayment

For expats, the “needs” category often exceeds 50%, especially in high-cost cities or transitional phases. Consider adjusting to:

• 60–70% for core living and relocation costs
• 10–20% discretionary
• 10–20% toward savings, investments, or remittances

📌 Reverse Budgeting (Income Minus Savings Goal)

Start by defining your monthly savings goal—such as $1,000/month—and subtract that from your income. What remains becomes your allowable cost of living.

This approach enforces financial discipline, especially for short-term assignments or long-term goals like repatriation, early retirement, or home purchase.

📌 Percentage of Net Income Rule

A general rule for long-term sustainability is to keep fixed living costs (housing + utilities + food) below 50% of your net income, regardless of location. This ensures flexibility to absorb fluctuations in spending, emergencies, or financial setbacks.

Accounting for Exchange Rate Volatility and Inflation

Exchange rate fluctuations and local inflation can dramatically impact your monthly expenses:

• If your income is in a different currency from your spending (e.g., paid in USD but living in Argentina or Thailand), a depreciation in the local currency can reduce real costs or increase them if the opposite occurs.
• Inflation in some emerging markets can reach 5–10% annually, rapidly eroding your purchasing power over time.
• Build in a 10–15% buffer for inflation or exchange rate shifts in your budget to avoid being caught off guard.

Some expats mitigate this by keeping a portion of savings in both local and hard currencies (e.g., USD, EUR) or using multi-currency digital banks to minimize transfer costs.

Cost of Living vs Quality of Life

A low cost of living doesn’t always translate to a high quality of life, and vice versa. Understanding the trade-offs between the two is essential for setting realistic expectations.

Quantitative estimates like rent and grocery costs don’t capture intangible factors that shape your day-to-day experience:

• Commute time: A cheaper apartment outside the city may add two hours of commuting.
• Healthcare quality: Affordability doesn’t always mean accessibility or high-quality.
• Public services: Safety, waste management, and transport infrastructure vary widely.
• Cultural integration: The cost of staying in an “expat bubble” may be higher socially and financially.

High-Cost Cities with High Quality of Life

Cities like Singapore, Zurich, or Copenhagen may have higher nominal living costs but offer clean air, world-class infrastructure, efficient services, and high safety standards.

In such cases, the elevated cost of living may be justified by reduced stress, improved health outcomes, and time savings.

Low-Cost Cities and Lifestyle Inflation Risk

While cities like Chiang Mai or Medellín offer attractive affordability, lifestyle inflation is a common pitfall.

Expats may overindulge in dining, travel, or imported goods because everything feels “cheap” relative to home. Over time, this undermines the cost advantage of living in a low-expense destination.

To maintain balance:

• Define non-negotiables in quality of life (e.g., walkable neighborhood, reliable internet, access to healthcare).
• Identify areas where you’re comfortable compromising (e.g., living in a smaller space or using public transport).
• Track whether your spending is improving your life or simply reacting to perceived affordability.

Mental and Emotional Considerations

Ultimately, financial optimization must serve your well-being. If a reduced cost of living means isolation, poor health outcomes, or dissatisfaction, the savings may not be worth it.

Conversely, a slightly higher budget that supports connection, purpose, and security may offer greater long-term value.

Pained by financial indecision?

Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.