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What Factors Affect Expatriate Cost of Living?

By Tara Barnett
Updated May 16, 2024
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Many different factors affect expatriate cost of living. These include food, housing, and other related living expenses, but may also include expenses specific to expatriates, such as the cost of maintaining storage in their native country. The safety of a country can also affect expatriate cost of living, as can standards of living associated with a particular profession. In general, expatriate cost of living is affected by both the conditions of the country and choices made by individuals.

Some of the most important factors that affect expatriate cost of living relate to basic living expenses. These essentially focus on what a certain amount of money will buy in an area. In many instances, the amount of money people in a country make will affect the cost of living expenses, but sometimes certain categories of items are more or less expensive than expected. It is therefore best to consider multiple aspects of living expenses together to come up with a complete picture.

Other factors that can affect expatriate cost of living involve expenses that are specific to expatriates. In some countries, the cost of living for a person born in a country may be quite low, but an expatriate may be required to live in special secured facilities. Transportation for expatriates can also be more expensive in some cities. In areas where security is required, hiring safety personnel can affect the cost of living.

Cost of living is also always affected by choices made by the people living in the country. People who live frugally tend to have a lower cost of living in any country than those who spend freely. Psychologically, this may also depend on who is paying for the expatriate's stay. When a company pays for a person to live in another country, it is usually expected that the company will provide that person with comforts appropriate to his or her station, even if they will never use them.

In many cases, the type of work being performed in the country affects expatriate cost of living. Certain jobs require significant amounts of travel, and in many cases,this in turn requires eating in restaurants on a regular basis. Members of some professions, such as teaching, tend to pack their lunches or eat relatively inexpensive foods. The length of stay can also affect expatriate cost of living, as people who have settled into a country for a long time will tend to live differently than those on a short assignment. Many different factors can come into play when living abroad, and the best way to figure out which factors are relevant is to make a personal budget from experience.

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Discussion Comments
By lluviaporos — On Aug 06, 2014

@Fa5t3r - It's not really fair to compare the tourist experience with the expat experience anyway. Tourists are almost always going to end up spending more money on food and lodging.

I think with expats, no matter where they live, the biggest financial danger comes from indulging in nostalgia for their home country.

I know when I was living overseas I would spend way more on imported foods than they were worth, just to get a taste of home.

By Fa5t3r — On Aug 05, 2014

@croydon - Ghana isn't as cheap as it used to be, although it's still very good value. I would recommend India, Turkey or Morocco if you're really looking to spread your dollars out. Although it also depends on what you want to do when you get there. The thing is that you are exchanging some safety and comfort whenever you go someplace where the food and hotels are cheaper. Fresh food in a small town in India is going to be more inexpensive but you don't have the same guarantee that you won't get food poisoning the way you would in a small town in Germany.

If you know how to take care of yourself, then it can be worth the risk. But some people on vacation would rather just pay more and get an easier experience.

If you are actually living in the country, of course, you can figure out the best places to get safe food and water and it's not so much of an issue.

By croydon — On Aug 05, 2014

Exchange rates can work wonders if you travel to the right place. Unfortunately it seems like it's usually quite expensive to get to the places that have the best exchange rates.

Ghana is one country I would highly recommend to people from the United States as a vacation spot, or a place to live on the cheap for a while. The people there would benefit a lot from more tourism dollars and the exchange rate is incredibly good, so you can live very well on very little money. Plus, it's on the ocean and the people speak English as a market language.

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