Expat FAQ

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How can you manage a high Cost of Living?

Everybody has different standards of living, but it is important to know what exactly you are getting into when you move to a city with a high cost of living. The definition of cost of living is the amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare. Cost of living is often used when comparing how expensive it is to live in one city versus another.

How to Prepare

Create a Budget

Setting up a budget is essential to living successfully in a city with high cost of living. You must evaluate your income, estimate your debts, and establish a savings goal.

  • Gather your financial statements. This includes bank statements, investment accounts, recent utility bills and any information regarding a source of income or expense.
  • Record all of your sources of income. This includes regular paychecks, benefits from self-employment, or any other income.
  • Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, auto insurance, groceries, utilities, entertainment, dry cleaning, auto insurance, retirement savings and essentially anything you spend money on.
  • Break expenses into two categories: fixed and variable. Fixed expenses are those that stay relatively the same each month and are required parts of your way of living. They included expenses such as your mortgage or rent, car payments, cable and/or internet service, trash pickup, credit card payments and so on. Variable expenses are the type that will change from month to month and include items such as groceries, gasoline, entertainment, eating out and gifts to name a few. This category will be important when making adjustments.
  • Total your monthly income and monthly expenses. If your end result shows more income than expenses you are off to a good start. This means you can prioritize this excess to areas of your budget such as retirement savings or paying more on credit cards to eliminate that debt faster. If you are showing a higher expense column than income it means some changes will have to be made.
  • Make adjustments to expenses. If you have accurately identified and listed all of your expenses the ultimate goal would be to have your income and expense columns to be equal. This means all of your income is accounted for and budgeted for a specific expense. If your expenses are higher than income you must look at your variable expenses to find areas to cut.
  • Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. After the first month take a minute to sit down and compare the actual expenses versus what you had created in the budget. This will show you where you did well and where you may need to improve.

Evaluate your Housing Options

Housing is almost always the largest allocation of your budget. If you are needing to cut back on expenses, these is the area in which a change can make the biggest impact. Consider downsizing, living in less desirable (but still safe) neighborhoods, or moving outside the limits. In many places, housing costs can drop dramatically moving outside of the downtown area. Another benefit of living in lower costs area is that costs in groceries, parking, utilities etc. are also lower.

Utility bills are another area of easier saving. Monitor you use and looks for areas of saving. Instead of turning up the air conditioning automatically, open a window. Cut a 20 min shower down to 15. Replacing appliances with energy efficient models can be a large saver.

Compare Transportation Options

Another major factor in your budget is your choice of transportation. Owning a personal vehicle is obviously the most expensive option, but may be necessary depending on your area and lifestyle. Consider your commute when looking at housing. Choosing somewhere that allows you to use public transportation or a short commute can make a difference. Also consider your public transportation options. There are often significant savings for monthly or yearly passes, and discounts for seniors and students.


The easiest way to minimize the cost of eating in a city with a high cost of living is to eat at home. Cooking at home is usually healthier and more economical. Look for savings at super markets, frequent discount grocers or places that sell in bulk, buy fresh vegetables and fruits from local markets, and buy things that are in season.

Cut back and save on Entertainment

When creating a budget, cutting out entertainment costs sounds a lot easier than it is. It is vital to most people's happiness to go, out, socialize, and be entertained. Again, students and seniors are often afforded discounts at museums, cinemas, and theaters. Never be afraid to ask. There are also combination tickets that can offer savings for a group of sites. Another option are last-minute tickets. Operas, theaters and other performance based venues may offer low-cost tickets shortly before show time. Movie theaters also offer low cost showings either for the first show of the day, of on a specific day of the week. Identify your favorite form of entertainment and inquire directly.

Don't forget the amount of free events in almost every city. Museums may offer free hours, art gallery openings even offer wine and snacks, and parks are a great way to spend an afternoon.


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