The Cost of Being an Expat

Anyone who lives within their means suffers from a lack of imagination.
― Oscar Wilde

Every year there’s a list of cities around the world that are most/least expensive. These lists are made to give potential expats an idea of what the cost of living might be abroad. So, what is behind the numbers? What is the cost of being an expat?

This year’s list includes a few cities that I have been to–one of which I lived in for five months. Beijing, Shanghai, Singapore, Hong Kong, and Tokyo are all in the top 10 most expensive cities for expats. Those last three are on the list mainly because of rent, though there are options for affordable housing in Tokyo as I found out.

Singapore Bayfront
Yes, Singapore can be an expensive city

The expat cost of living is a bit biased as it focuses mainly on Americans and British abroad, which is why Silicon Valley, Manhattan, and London aren’t in the top 10.

One bit I find odd in determining cost of living is that it mentions the cost of owning a car in Tokyo. I wonder why an expat would own a car considering the public transportation system in the metro area is convenient, albeit not as affordable as other major cities in east Asia.

Bund Shanghai
Shanghai along the Bund

Let’s look at some of the expenses listed in the report

Cost of coffee in Hong Kong is more than US$7. Seriously!? I know I haven’t been in Hong Kong in many years (I’m heading back in September), but I’m sure I could go to a coffee shop chain for less. I’m certain Starbucks is only about US$3. But hey, it claims a small imported beer is only US$1.2–but there are probably better beers for a bit more than that.

Victoria Harbor Hong Kong
Victoria Harbor from the Star Ferry

Of course, this also assumes one is paying more than US$12,000/mo for a three-bedroom apartment in the city. Rent is expensive (think about US$1000 for a closet in Kowloon or Central), but not that many people need a huge apartment in Hong Kong. It also mentions that a two-bedroom apartment in New York is more than US$5000/mo. I know people who have found cheaper places to live in the city.

From what I got from talking with my former coworker, Singapore is still more expensive for rent–mostly because it’s non-locals who rent. He told me that he was paying about US$1600/mo for a room in an apartment and still had a 40-minute commute to work.

sambal stingray
It’s possible to find affordable food in Singapore

And when it comes to drinking, many cities are expensive. My uncle once bought us martinis in Hong Kong for US$17 each (coming from Manhattan, even he was surprised by the price). Other than Seoul, developed cities in east Asia are expensive for drinkers, and expats tend to enjoy going out more often. Even in Taipei, where rent, food, and transportation are cheap or reasonable, a decent drink will set you back more than US$5 (about US$3 on the cheap end). I won’t complain about beer prices back home when a cheap beer in a Tokyo bar is US$7.

Taking the survey with a grain of salt

Obviously, the cost of living survey does not include expats who are teaching in these cities and living on a budget. A lot of those surveyed are likely to be sent abroad by their companies on an expat package, which provides a much higher standard of living. When I lived in Shenzhen, there were neighborhoods designed for people on expat packages–houses that cost more than my monthly salary. Many of those people ate out at high-end restaurants and took taxis everywhere (or had a private driver). Meanwhile, I could rent a three-bedroom apartment in a decent neighborhood for about US$500 (I know the rent has gone up significantly since 2009).

View of Tokyo from the Sumida River
View of Tokyo from the Sumida River

My friend in Tokyo has mentioned a few times how the city isn’t as expensive as everyone claims. The problem is that most tourists end up at restaurants with English menus, which immediately raises the price of a meal. I actually found the average meal in Seoul to be more expensive. Overall, I thought Venice was more expensive than Tokyo.

The point is, judging a city based on the prices in such surveys is ridiculous. The surveys also ignore living standards and ideas of happiness. There’s plenty to do in every city that costs little or nothing–hiking in Tokyo and Seoul is free.

Rialto Bridge in Venice, also known as the bridge of shops I cannot afford
Rialto Bridge in Venice, also known as the bridge of shops I cannot afford

It also doesn’t mention anything about healthcare. While I wouldn’t recommend most hospitals in Beijing and Shanghai, Tokyo and Singapore are top notch. Universal healthcare keeps those costs to a minimum. Sometimes it’s worth paying a little more for rent or food in exchange for cheap healthcare. I only pay about US$5 to visit the doctor in Taipei, and medication is free with the prescription.

What is the real cost of being an expat?

This answer varies on the person and region. I’ve found it easy to live well within my means anywhere in the world. It comes down to habits.

Generally, I don’t take taxis. I’ve taken quite a few more in Taipei because they’re affordable and sometimes I want to stay out past midnight, but I tend to avoid the added expense. Walking is free and public transportation is always affordable.

It's possible to find cheap espresso in Venice
It’s possible to find cheap espresso in Venice

Before moving anywhere, it’s best to consider how much space you need to live. If you’re not staying long term, why splurge on a huge apartment? I’ve found that I can live comfortably with a smaller apartment than I would typically consider back in the US. It means that should I move back, I could save on rent with a smaller place.

How often do you really need to go out for coffee? I’ll admit I’m starting to go out for coffee more often, but that’s as a treat and to get out of my apartment. In Tokyo, I’d have a coffee at Starbucks (only half-decent coffee shop within 2 miles of my apartment) so I could sit and write for a few hours. For US$2-4 I can afford to treat myself every now and then–it’s cheaper than a good beer at a bar in Taipei.

Redpoint TaiPA
I prefer to spend a bit more on local craft beer

Also, who are these people who pay US$120+ for a pair of jeans? Last pair I bought here in Taipei was about US$20. I also noticed that, in general, clothes in Tokyo and Seoul were much cheaper than in Taipei–I bought a suit in Tokyo for US$50 and one in Taipei for US$150 (I like the one from Tokyo more).

Cheonggyecheon Seoul
Some of my favorite entertainment in Seoul was free

Of course, no matter where you live, it’s cheaper to cook than to eat out (healthier, too). An advantage I found in Tokyo was going to the grocery store around 6 pm or later when they began marking down things like fruit, vegetables, and fish as well as pre-made meals. It’s similar in Taipei, but there’s no set time that the stores begin marking down food.

How do you feel about such surveys? What costs do you consider before moving/traveling to a new city?

1 thought on “The Cost of Being an Expat”

  1. I’m a full time expat. I’ve lived on five continents and have been traveling every three months to a year for 20 years. Rent is a HUGE expense in cities with lots of expats as the local market changes to exploit … I mean accommodate expats. If you’re traveling with others, you can share the expense. I’m a solo traveler–so that means deposits, first, last, and other ancillaries. Or you pay up for a just-move-in furnished and equipped unit. But if the city is popular with expats, rent will in some way be expensive. I’m talking about expats traveling on a budget–not business owners…

    The other major expense of being an expat is all the traveling. Depending on how long you’ll be in city (three months? six?), you often have to have two tickets–getting there and an onward ticket. Maybe you don’t know where you’ll go next so you might have to take a hit on your “onward ticket” to convert it to a ticket to the city you later become sure you’ll visit next. Even so, tickets can be over $1000 each way. Sure, you can get deals, but not always.

    And if you’re no longer 21 or 22… supplemental international health insurance becomes more important. Things tend to just go wrong more easily as you get older. Add to this another expat charge: the unofficial expat tax. Locals can be very shrewd in extorting … gosh, I mean strategically raising prices on everything from rent to the cost of groceries for expats even if you avoid the touristy areas.

    When I started my expat journey straight out of college, it was cheaper to be an expat and work remotely. But as hundreds (thousands…?) of online mags/blogs advertise being an expat and more and more Western college grads find their degrees and internships don’t land them jobs to pay off expensive college loans, let alone actually afford an apartment, the expat community internationally has really, really expanded. This means what was once affordable is becoming nearly as expensive, or even more so, than what’s back home. In my starting expat days, I could rent a furnished apartment in Panama for less than a quarter what I would pay for a studio back in the States. Just three weeks ago I looked at returning to Panama to live in the same apartment community I used. The rent prices had QUADRUPLED for fewer services. Why? Because a US language school had recently opened up nearby and expats needed housing.

    Being an expat can be lots of fun, but it’s no longer much cheaper than staying home. By the time a lot of these surveys are published, it’s often already becoming costly for expats to move to the popular spots.

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