As more and more people look to move overseas to begin live and work abroad the hunt for the cheapest countries to be an expat continues. However, there are many different aspects to take into account when looking for the “cheapest countries” and indeed it is not as straightforward as you might assume. In simple terms the ability to compare like-for-like situations, such as property, etc, should allow you to compare different countries although in reality you will find some services are more expensive and other aspects of “normal life” are less expensive. There is no country in the world where on a like-for-like basis every element of your normal everyday life would be cheaper.
In order to give you some idea of the opportunities out there we will separate the hunt for the cheapest countries to be an expat into various areas of the world and drill down further with more data.
Historically Europe has been one of the most expensive areas of the world in which to live although the ongoing problems with regards to Greece, Portugal and Ireland have given many people a serious wake-up call. While Greece is currently going through one of the most difficult budget realignments of all time you could argue that during this difficult time the cost of property, services and other elements of everyday life could be very attractive to many people.
In general the cost of living in real terms around the world, excluding the cost of food, has fallen over the last few years due to the ongoing worldwide recession. Raw material prices and the cost of petrol/diesel have impacted upon food costs around the world but many companies are struggling to pass on these cost rises. Therefore, for those looking to take a chance with regards to a new life overseas, and those with enough money in the bank to see them through the next few years, countries such as Greece, Portugal, Ireland, Spain and others which have suffered heavily during the ongoing recession could prove attractive. If you are considering expatriating to one of these countries you may wish to set up an easy-access offshore bank account in euros, even before you arrive!
Indeed there is also an argument for the UK falling into this category with regards to one of the cheaper countries in Europe although many would argue that the tax background in the UK is one of the most unwelcoming in the world. VAT has recently risen, fuel tax seems to go up and up and many everyday expenses seem to be pushing ahead at a time when others around the world are fighting to keep their costs down.
Places to consider for those of a brave disposition include Greece, Portugal, Spain and perhaps even the UK.
Post recession USA
In general the cost of living in the USA is not always as attractive as many would hope although there is no doubt that the ongoing problems with regards to property values and the economy has impacted to a greater extent in some areas of the USA. When you also take into account the problems which have been felt by state such as Louisiana, with the hurricane of 2009, you could argue there is potential for a relatively low base on which to build a life for the future. Others would argue that the collapse of the local economy, local businesses and allegations that the area has been effectively disowned by the US government make life in Louisiana harder today than in the immediate aftermath of hurricane Katrina.
We often forget that America is made up of a massive number of states each of which has individual elements unique to their situation. As a consequence, while the US government and the other US authorities tend to concentrate upon the more affluent areas of the country there is definitely potential for a relatively cheap cost of living in some of the “less fashionable” states. However, obtaining access to America at this moment in time can be difficult unless you have a relatively large funding pot in place or indeed have business contacts or business arrangements in the pipeline.
In simple terms, the aftermath of the worldwide recession has opened the eyes of many expats to many areas of the world which have long been forgotten as “cheap living quarters”. Whether the USA falls into this particular group remains to be seen but there is no doubt that some US states are literally crying out for assistance and inward investment. If you are considering being an expat in the USA, and are moving from a non-dollar-using country, why not open an offshore bank account in dollars before you arrive?
In years gone by Latin America was an area of the world which few people were brave enough to even consider as a new homeland but things have certainly changed over the last 20 years or so. Despite the fact that the cost of living, cost of property and other everyday services has in some areas increased dramatically it is easy to forget this is from a relatively low base. Mexico, Brazil, Panama and Columbia have become hot topics in some areas of the expat community although in reality there are many other areas of Latin America to consider.
Many people will be as surprised to learn that countries such as Brazil, Chile and Uruguay have relatively strong currencies which allow visitors and investors the ability to look forward and forecast potential investment returns. When you also take into account the likes of Mexico, Panama and Columbia, which vary dramatically in size, there is the potential to pick and choose specific countries in Latin America and also specific areas of these countries.
Brazil for example offers a massive divergence of income and expenditure from those at the very top of the social ladder to those at the very bottom living in some of the largest shantytowns in the world. Finding an acceptable area of Brazil to live in, both from a standard of living and cost of living angle, is not always easy but many expats have collated round some of the outer extremities of Brazil’s thriving cities and towns.
Areas to consider in Latin America include Brazil, Mexico, Colombia, Panama and even the likes of Guatemala, Honduras and Nicaraguan.
One area of the world which has in many ways remained relatively cheap with regards to the cost of living is Asia. Even though there have been some significant rises in the cost of living across many areas of Asia over the last 20 years or so they do still compare relatively well to the likes of Europe, North America and South America. However, while on the face of it there are many attractions for those looking to move lock stock and barrel to Asia that may well be a number of potential stumbling blocks in the way of red tape and income/saving requirements.
If there is one subject that returns time and time again with regards to the cost of living in Asia it tends to be the cost of property in countries such as Malaysia and Thailand. However, in some instances it may be impossible for you to actually own property outright unless you are able to abide by fairly strict laws in the region which may require the co-operation of a “national”. There are also some issues with regards to visas and entry into some countries with many governments only offering short-term visas which effectively force expats to leave the region on a regular basis and return after applying for a new visa. These are elements which can obviously increase your cost of living and when you also take into account the cost of flights to the region it can soon begin to add up.
However, when you take into account the cost of living in other areas of Asia such as Bangkok there are certainly many attractions for those of a more adventurous mind. Unfortunately, as we see in other smaller countries around the world, the reputation of countries such as Bangkok does tend to affect the number of visitors even if there have been significant improvements in law and order and other aspects of life in the area.
As we have mentioned on numerous occasions, when looking to move overseas you do need to do your homework with regards to the cost of living, cost of property and other essential services but you also need to take into account local laws, regulations and potentially counter-productive visa requirements.
Areas to consider in Asia include Thailand, Malaysia, Bangkok, Vietnam and even Cambodia.
Other issues to consider when moving overseas
The cost of living is just one of many different issues you need to take into account when looking to begin a new life in a new country. However, the cost of living in a region can be affected by a whole variety of different situations, the vast majority of which are out of the control of the everyday expat. They include:-
If for example you compare the cost of living in your current homeland to the cost of living in one of the countries we have mentioned above you may well see that there are many attractions using today’s currency exchange rates. However, if, as we have seen in the past, there are significant swings in exchange rates around the world then all of a sudden your cost of living could rise by anything up to 5%, 10%, 20% or even above in a very short space of time. There have been a number of economic difficulties in Asia, for example, in recent years and while things are fairly steady at the moment this may not always be the case. To learn about using FX and the currency market, use an online FX tutorial.
If there is one aspect of the cost of living across the world which is mentioned on numerous occasions it is the influence of outside parties with regards to any one country. One example the historic dependence of some South American countries on the USA for both economic output and in some cases financial assistance can impact upon the short, medium and long-term cost of living. In times of austerity, such as we are experiencing today, countries such as the USA will withdraw their overseas funding to many countries and attempt to concentrate upon improving their own economy before looking out with. There are similar examples of this in the Far East where the likes of China and Japan are very influential and can impact enormously on the cost of living in the region as a whole.
Your average expat looking to move overseas for a new life will be looking for a balance between economic growth and an acceptable cost of living. The truth is that sometimes there may be a squeeze on disposable income before the full benefits of an economic rise are felt by the general public. This can often see the cost of living increase quicker than average income in the region and can put significant stress on some finances. It is therefore vital that when looking to move to any area of the world you have a buffer in place with regards to your finances allowing for an increase in your cost of living, hopefully prior to any increase in your income, which will allow you to take much of the sting out of any unforeseen difficult situations in the future.
If we mention the word cheap this brings to mind a whole host of different thoughts and opinions which offer great food for debate. When looking to move to a “cheap” country do you compare the cost of living against the average income in the country, cost of the bare necessities, cost of luxuries or do you focus more upon the cost of property?
The truth is that you can pick and choose any individual “cheap country” around the world and there will be aspects of life in your potential new homeland which will be very different to your current homeland. There will be services and activities which are not available, there will be additional red tape, there may be potentially excessive travel costs and nobody knows what the future holds. Therefore taking the basic cost of only one element of a “general cost of living” or indeed taking a small batch of living costs can be very dangerous unless considered in tandem with the overall picture.