Portugal is expensive to live, specially when you live in big cities like Oporto and Lisboa. I live near Aveiro. Is not that expensive and we have quality of life
Yes, I understand. My point was that to make an apples to apples comparison, and draw a conclusion, one has to account for the rent/mortgage here in some way. Most people are renting so that cost would be included in their decision making. Once that adjustment is made, the comparison is not favorable. And, I find that rather odd because it is far less expensive here for us, even with the rent, and I did not have a mortgage for the last 10 years in Dallas. But, I think the difference is that you two lived far less expensively than we did so our comparison number starts out far higher. There was no way we could have spent as little. Texas being a high property tax state made that number, in 2010, $10,000 per year. Utilities, the same. Homeowner's insurance, umbrella policy, individual health insurance, car insurance, pool maintenance, etc, and I haven't even eaten yet, much less driven anywhere. That's what makes this so interesting. Everyone is coming from a different place and experience. It would never even have occurred to me that anyone might find Portugal more expensive. But, clearly, for some it can be.
We've always been frugal and we were in a pretty low cost of living area in the US (St. Louis). Most of the Americans we've met here are from the coasts where expenses tend to be much higher. Dallas, too, apparently.
As you say, everyone is coming from a different place and experience. So take all of the budget reports you see online with a grain of salt.
Our groceries are higher, but that's probably because we are spending about €20-30/week on wine and beer. Our restaurant bill is higher too as we go out twice a week, Friday night is pizza at €20-25 and Saturday local restaurant €40-50. We also have two cars, so American, that run us (gas, insurance, maintanance) about €250 month (gas being the big expense as insurance and maintanance are cheap compared to the U.S). We only pay about €400/yr for property tax and insurance. Internet/TV/phone runs about €100/mth (depending on how many movies we stream). Utilities run us about €130/mth. Health insurance is higher than the US as we prefer private insurance vs the public health system. Our annual premium is now €6400, almost double what we would pay in the U.S. for Medicare. The big consideration is taxes. Right now we are under the NHR so taxes are only about €1500/year more than the US. However, once the NHR lapses that will grow to about €4-5,000 more than the U.S. Unfortunately, the NHR is no longer available for new residency applicants in 2024.
We share the same experience with regard to food costs, and for sure the taste is so much better at the local mercados than anything in the U.S. Also, utilities and mobile/cable costs. But, I think some of the analysis is not an apples to apples comparison. For example, you mention that you had a mortgage before. But, you purchased the place you currently live in. There is an opportunity cost to the purchase. The money spent to purchase (which avoids rent) should earn a minimum of 4%, and closer to 5%, of the total spent for the property. So, somewhere between 24,000€ and 30,000€, if I remember the numbers correctly. That is per year and would be expected to grow over time as that money is re-invested. Also to be considered is the size. Most places here at that purchase price are far smaller than what people had in the U.S.
Yes, there is definitely an opportunity cost to purchasing the home. It's money from the "long term" bucket which reduces the "short term" costs. That was a tradeoff we were willing to make.
I’m confused why you expect the Euro and the US dollar to have parity. Sure, in a casual sense they’re not too far apart in value right now, but the value of the Euro is not pegged 1:1 to the dollar, or vice versa. I’ve seen the Euro vary from $1.03 to $1.24 per Euro. The Euro is what it is, the dollar is what it is. You are not losing 10% to the ether. You can’t consider €35,000 as the same as $35,000.
Or better yet, maybe you’re comparing apples to oranges. Say apples cost $1 apiece while oranges cost $1.09. If you spend $100 on apples and then the same amount on oranges, you’ll end up with 100 apples and roughly 91 oranges; the value (cost) of the two groups of fruits is the same despite the differing quantities.
Portugal is expensive to live, specially when you live in big cities like Oporto and Lisboa. I live near Aveiro. Is not that expensive and we have quality of life
Yes, I understand. My point was that to make an apples to apples comparison, and draw a conclusion, one has to account for the rent/mortgage here in some way. Most people are renting so that cost would be included in their decision making. Once that adjustment is made, the comparison is not favorable. And, I find that rather odd because it is far less expensive here for us, even with the rent, and I did not have a mortgage for the last 10 years in Dallas. But, I think the difference is that you two lived far less expensively than we did so our comparison number starts out far higher. There was no way we could have spent as little. Texas being a high property tax state made that number, in 2010, $10,000 per year. Utilities, the same. Homeowner's insurance, umbrella policy, individual health insurance, car insurance, pool maintenance, etc, and I haven't even eaten yet, much less driven anywhere. That's what makes this so interesting. Everyone is coming from a different place and experience. It would never even have occurred to me that anyone might find Portugal more expensive. But, clearly, for some it can be.
We've always been frugal and we were in a pretty low cost of living area in the US (St. Louis). Most of the Americans we've met here are from the coasts where expenses tend to be much higher. Dallas, too, apparently.
As you say, everyone is coming from a different place and experience. So take all of the budget reports you see online with a grain of salt.
Our groceries are higher, but that's probably because we are spending about €20-30/week on wine and beer. Our restaurant bill is higher too as we go out twice a week, Friday night is pizza at €20-25 and Saturday local restaurant €40-50. We also have two cars, so American, that run us (gas, insurance, maintanance) about €250 month (gas being the big expense as insurance and maintanance are cheap compared to the U.S). We only pay about €400/yr for property tax and insurance. Internet/TV/phone runs about €100/mth (depending on how many movies we stream). Utilities run us about €130/mth. Health insurance is higher than the US as we prefer private insurance vs the public health system. Our annual premium is now €6400, almost double what we would pay in the U.S. for Medicare. The big consideration is taxes. Right now we are under the NHR so taxes are only about €1500/year more than the US. However, once the NHR lapses that will grow to about €4-5,000 more than the U.S. Unfortunately, the NHR is no longer available for new residency applicants in 2024.
Helpful stuff!
This is very interesting. Thank you for sharing.
We share the same experience with regard to food costs, and for sure the taste is so much better at the local mercados than anything in the U.S. Also, utilities and mobile/cable costs. But, I think some of the analysis is not an apples to apples comparison. For example, you mention that you had a mortgage before. But, you purchased the place you currently live in. There is an opportunity cost to the purchase. The money spent to purchase (which avoids rent) should earn a minimum of 4%, and closer to 5%, of the total spent for the property. So, somewhere between 24,000€ and 30,000€, if I remember the numbers correctly. That is per year and would be expected to grow over time as that money is re-invested. Also to be considered is the size. Most places here at that purchase price are far smaller than what people had in the U.S.
Yes, there is definitely an opportunity cost to purchasing the home. It's money from the "long term" bucket which reduces the "short term" costs. That was a tradeoff we were willing to make.
I’m confused why you expect the Euro and the US dollar to have parity. Sure, in a casual sense they’re not too far apart in value right now, but the value of the Euro is not pegged 1:1 to the dollar, or vice versa. I’ve seen the Euro vary from $1.03 to $1.24 per Euro. The Euro is what it is, the dollar is what it is. You are not losing 10% to the ether. You can’t consider €35,000 as the same as $35,000.
Hmm ... maybe I have been thinking about this incorrectly.
To me, it's been like if I have 20 iron ingots in the bedroom and then move them to the kitchen and there's only 18 of them, I've lost 10% of them.
But if the goods in the kitchen require fewer iron ingots to purchase than the goods in the bedroom do, then it all comes out in the wash.
I guess, then, the question is whether the goods in the kitchen are, in fact, less expensive.
Or better yet, maybe you’re comparing apples to oranges. Say apples cost $1 apiece while oranges cost $1.09. If you spend $100 on apples and then the same amount on oranges, you’ll end up with 100 apples and roughly 91 oranges; the value (cost) of the two groups of fruits is the same despite the differing quantities.