Cost of living in Portugal versus the USA

What do ex-pats think of the cost of living in Portugal versus the USA? Here are some estimates comparing rent, utilities, education, and more!

Article by Viv Europe - Official Legal and Relocation Partner to KipperTree.

November 21, 2022 

There’s surely a reason why American ex-pats are flocking to Portugal instead of elsewhere! The country welcomes millions of tourists every year, and a few thousand decide to make it their forever home. The difference is drastic when they compare the cost of living in Portugal versus the USA. But is that the only determining factor? 

Usually not. Of course, the cost of living is indeed a huge advantage, especially when Portuguese cities have advanced just as much as California. However, there are plenty of other factors that make this country worth it. 

Let’s analyze the difference between living costs in Portugal and the USA concerning rent, utilities, education, transport, leisure, and more. Where can you get the most out of your earnings? There’s only one way to find out. 

How expensive is living in Portugal?

The cost of living in Portugal is very affordable compared to the rest of the European countries. You can live a comfortable life making modest earnings while enjoying the most luxuries. 

People in Portugal earn less compared to other European countries. However, this does not hinder the lifestyle because the cost of living in Portugal is relatively low. An individual can live a comfortable lifestyle for under €1,200 ($1,239) in most areas of the country. 

While there’s no doubt that living in Portugal is inexpensive, prices do fluctuate depending on your lifestyle and location. You will spend more money if you reside in expensive cities like Lisbon or Cascais. In contrast, Oeiras, Viseu, or Braga can be much cheaper options. 

How expensive is living in the US?

The cost of living in the US is pretty high, but it also varies from state to state. An average American household spends an estimated €57,996 ($60,000) per year on general expenses, rent being the largest of all, a whopping €1,691 ($1,750) per month on average. 

New York, San Francisco, and California are some of the most expensive cities. However, there are still some well-known places where life is still reasonably priced. For instance, the average cost of living in Oklahoma City or Cincinnati is much lower than in other large cities. 

Mississippi has the lowest cost of living in the United States. Naturally, living costs will be much lower if you stay entirely out of the cities.     

As per Numbeo, the cost of living in the USA is roughly 40% to 50% higher than in Portugal. Groceries, rent, and utilities are much more budget-friendly in Portugal. 

Cost of living in Portugal versus the USA

Moving to another country is never too easy. In addition to starting a new life, you try to adapt to the unique culture and new way of life. You’re most likely never going to consider the aesthetics of the country first but the cost of living. 

Portugal is a favourable destination for ex-pats searching for a high quality of life and a lower cost of living, especially after retirement. 

You can only make the best decisions when there’s enough research about each aspect that affects you the most. Portugal is known to be the best option for retirees, real estate investors, and digital nomads.

Let’s look at some of the essential things to compare the cost of living in Portugal versus the USA.

Cost of rent

The cost of housing eats up a significant portion of American salaries as it covers nearly one-third of their income. The average rent for a one-bedroom apartment in the US is €1,619 ($1,675) per month, and rent is higher in more expensive areas like Massachusetts, where rent is €2,029 ($2,100) per month.

In contrast, rent expense in Portugal is significantly lower compared to the US. The rent for a one-bedroom apartment is €684 ($710), which is half the amount compared to an apartment in the US. 

The rent prices in the United States are 101.67% higher than in Portugal. Below is a comprehensive summary of various residence options and their relative rent pricing.  

The prices of rent are from Numbeo (as of November 2022).

Utilities 

Utility expense in Portugal is 60% cheaper compared to the US. The only additional cost would be power during the summer when it is extremely hot in Portugal.

The average monthly utility costs in Portugal and United States are listed below. Let’s not forget you can still restrict or increase these expenses by adjusting your budget. Also, the prices you pay each month may vary based on how much you use them each month and how large your accommodation is.

Groceries

Locally produced vegetables, fruits, and meat are much lighter on the pocket in Portugal. The Portuguese culture also values cooking at home and sharing meals with family and friends. So, you’ll often find people shopping at farmer’s markets rather than eating at restaurants. 

As per Numbeo, grocery prices in the United States are 105.43% higher than in Portugal. Here is a quick comparison of grocery prices in both countries.

Estimates are from Numbeo (as of November 2022).

To carry on reading this article and to discover all about eating and drinking, Transport costs, Leisure costs, Education and more read the full article here