» How Much Does it Cost to Live?

I read a news item in the last few weeks on the sorry plight of British ex-pats living in Spain and Portugal and how difficult they were finding things these days. Brits have been hit hard by the exchange rate fluctuations over the past eighteen months or so, from around 1.40 euros to the pound back in 2007 to almost parity in early 2009.

But I did find it hard to accept the media story at face value. It suggested that ex-pats need a minimum of £1,000 per month for living expenses. Many ex-pats are living mortgage-free in places that have a warmer climate than the UK, which means that annual fuel costs are less. Accepted, we’ve just had the worst winter in many years in these countries, and fuel costs this last few months will have been higher. Offset against this is the ‘free’ hot water that anyone with a solar water system enjoys. It doesn’t need full sun all day to get a tank of hot water, just a few hours or so.

Also offset for many people is the winter fuel allowance paid by the UK government, which is still paid even if you’re sunning yourself on a sandy beach.

So with no mortgage to pay, that £1,000  (around 1,100 euros at current exchange rates) has to pay for utilities, food and entertainment, plus some funds for savings and emergencies.

It all comes down to lifestyle choices.

If you choose to visit cafes every day and eat out at night, the expenses are going to add up quickly. If you’ve chosen to live abroad but want regular trips back to the UK the costs are going to mount.
If you’ve chosen a life style that is similar to a never-ending holiday, you can expect to pay for it. But with a little effort it’s possible to live on a lot less and still enjoy this ex-pat life.

We rent an apartment and have the following regular monthly expenses (for 2 adults):

Choose to spend lots of time eating out and your living expenses will be higher

rent 320 euros
internet 50 euros
utilities (electricity for heating, hot water and cooking) approx 50 euros
food 250 euros
fuel 50 euros
money saved for annual bills (car tax and insurance, other insurance etc.) 150 euros

Total 870 euros.

That still leaves us around 230 euros a month from the notional 1,100 for other expenditure. I can live with that.

When we finally get our own place we’ll save that 320 euros rent monthly. And one day we may even get access to broadband internet, which will bring these costs down even further. We’re starting to grow vegetables which will shave a bit more off those food bills.

I’m not suggesting that everyone should make the same choices that we have. But at the end of the day that’s what it’s about: the choices we make. An economic downturn is an opportunity to review those choices, to think about the habits you’ve gotten into and whether they’re all good ones.

I’m sure it’s it’s as difficult for people who were used to getting 1.40 euros per pound to quickly adjust to this change in their income as it is for anyone else suddenly faced with a significant income drop, for example due to redundancy. But unless they were already living to the limit of their income there should be the potential to make savings. And surely this is a better option than moving back to the UK, which seems to be the automatic reaction of many caught in this situation, according to the media.

The media have a very powerful voice. The problem is that so many people take what is said as truth. So if the media say it can’t be done, it can’t. But in reality it can. All it takes is a willingness to make choices, a little flexibility and ingenuity.