Thought you might find it interesting to see what it costs us to live here…
Before you jump ahead and take a peek at our average monthly expenses, I think it is important to state that these expenses reflect our lifestyle choices and preferences. We are both retired and have no dependent children, only Sweet Pea (our 12-year old wire haired fox terrier). Obviously, you can spend a lot less or a lot more depending on your resources, preferences, circumstances, and choices so please keep that in mind.
We also live in one of the most expensive areas in Portugal. We made a conscious decision to live in Monte Estoril for a variety of reasons, some of which included proximity to Lisbon without being in the city itself, quick and easy access to the coastline, reasonable driving distance to the Lisbon airport, walkability of the neighborhood, and access to convenient nearby services like a small market and café. But, the most important criteria was the place we selected allowed us to have our dog with us. Having said all that, and after living here for a year, we know there are other areas near Lisbon that could meet that criteria. Regardless, we love living in Monte Estoril.
Overall, Portugal’s average cost of living is quite affordable especially compared to the United States. As an example, your overall purchasing power here is about 57% better than in the US. The following are some recent cost comparisons between Portugal and the US from the site Numbeo. Be forewarned, this site is addictive based on all the ways you can look at, and compare, cost of living data points, including comparing specific cities in addition to countries.
|Consumer prices – 26% lower (without rent)|
|Rent prices – 46% lower|
|Restaurant prices – 37% lower|
|Groceries prices – 40% lower|
While the cost of living is less expensive here than in the US, we have found that some items are more expensive such as cell phones, computers, and cars. As an example, last month Won priced out the new Apple iPhone 12 (256 GB). In Portugal it is on sale for 1099,00€ ($1340.00). You can buy the same phone in the US for $979.00 (802,00€). Additionally, there are no mobile plans that allow you to pay off the phone monthly, like there are in the US. You must buy it outright.
On the other end of the spectrum, and I’ve mentioned this in a prior post, the cost of healthcare and health insurance is shockingly low compared to the US and the quality is just as good.
The following is a summary of our average monthly expenses. All amounts are in euros with the exception of our car insurance, which we still pay in US dollars because it is a US-based provider that we pay through one of our US-based bank accounts.
|Category||Avg Monthly Expense||Notes|
|Rent||1.500,00€||We have a 2-bed, 2-bath, fully furnished apt with a washer, but no dryer.|
|Utilities (electricity, water)||150,00€||Avg water bill is ~35,00€. Electricity usage can vary widely depending on the season (there is no central heat or air conditioning in our apartment) and all our appliances are electric.|
|Cell, Cable, Internet||85,00€||We use Vodafone and pay an extra 10,00€/mo. for a premium sports channel.|
|Health Insurance||260,00€||This is paid annually (a requirement by the provider).|
|Car Insurance||$325.00||This is paid in US dollars because it is a US provider. The amount will drop by ~75% once the car registration process is complete and we can purchase local insurance.|
|Groceries||950,00€||Alcohol (mainly wine) represents ~15% of the total (hey, no judgment…).|
|Eating out||200,00€||Includes food delivery during lockdowns.|
|Transportation||200,00€||Includes premium gasoline for our BMW and toll costs which are charged through Via Verde (automated toll system); we own our car outright.|
|Personal care||200,00€||Hair cuts, pharmacy purchases, skin care and make-up products.|
|Petcare||100,00€||Food, vet care, grooming, boarding.|
I purposefully did not include some very specific items that are unique to our situation and preferences such as Won’s golf membership, our monthly health club membership fees and associated services like facials, massages, and personal training, and our monthly expenses related to the storage of household items still in the US along with property insurance to protect them.
Also excluded is the cost of Google Fi for our two cell phones with US numbers. We keep them because mine is associated with Sweet Pea’s microchip and Won uses his for banking and stock trading purposes. We pay approximately $70.00 USD per month depending on the data usage. The cell phone line item in the list above represents one local mobile number (you really need one here) and our land line which was included in the internet/cable bundle. We both switched from Verizon to Google Fi before we left the US so we would have coverage the moment we landed in Portugal. Google Fi is a telecommunications service offered by Google that provides telephone calls, SMS, and mobile broadband using cellular networks and Wi-Fi. Won has two phones (the local number and the US number). I only have one with my US-based number.
I also chose not include what we spend on travel because that can fluctuate pretty wildly depending on personal preferences and frequency. However, in an attempt to give you a baseline, we spent 1.556,00€ on our trip to Porto last October. In addition to hotel and restaurants, that amount includes the cost to board Sweet Pea, fuel, and tolls since we drove. To see where we stayed (5-star hotel), what we did, and where we ate (which included a Michelin Star restaurant), click here, here, and here.
We keep the majority of our financial assets in the US which means we have to convert dollars to euros when we need to transfer money to our bank account here. To do that we use a company called Wise.com (formerly Transferwise.com), a London-based online money transfer service. Won checks the exchange rate daily in order to take quick action if the rate drops to a level that would be advantageous for us. For example, when the rate was 1€ to $1.06 USD last May, Won transferred an entire year’s rent money to our bank account here. It was a smart move, the current rate is now 1€ to $1.22 USD. We never transfer money directly between banks because it is a lot more expensive. For example, our Portuguese bank charges 6,24€ per transaction on top of an administrative fee. Wise.com only charges 0,35€ per transaction. You might not think that’s a lot, but if you are transferring money frequently it can add up.
Won just made a good point; we often use our US-based credit cards when paying for goods and services because we build up points to offset travel costs. Some merchants give you the option to pay in euros or US dollars. When that happens we always pay in euros because our credit card banks have a better conversion rate than the Portuguese merchant’s banks, plus the merchant will sometimes add an administrative transaction fee on top of the conversion rate, which they will often set. For example, we had to take Sweet Pea back to the vet this week. My Google Pay app wasn’t working for some reason so I had to use a physical credit card. I accidentally chose the US dollar option over the euro and it ended up costing us 3% more on top of the 1.26 conversion rate they applied (which is higher than the current exchange rate of 1.22). That mistake cost us $3.00 USD on a 63,86€ bill. That’s not a huge amount, but you can see how this could add up over time, or how much more expensive it would have been if we had been buying something more expensive.
The other ways we maximize our purchasing power is by signing up for loyalty programs just like we did in the US. We have loyalty cards with two large supermarket chains – Continente and Pingo Doce. We get a 0,05€ per litre discount on feul from BP as a result of our ACP membership – ACP is the Automobile Club of Portugal. Pingo Doce also provides a discount on BP fuel based on how much you spend. Last month that discount came to 8,00€. And, finally, we joined AFPOP to secure a discount on our health insurance (to learn more about that and what it cost, click here).
I hope you found this informative and useful, especially if you are planning or thinking about moving to Portugal. Otherwise, feel free to drown your sorrow in a tall glass of [insert your favorite alcoholic beverage here] if your cost of living is higher or, celebrate with the same beverage if your cost of living is lower. Either way, you have an excuse to drink! You’re welcome.
Until next time, please stay safe, stay healthy, and stay in touch.
From Portugal with love,