88: Would I be financially better off living in the US or Europe? [replay]

When I was thinking about moving abroad, a few people warned me that my salary would likely be lower if I moved to London. And honestly? I didn’t care. I wanted to move to London so badly that a lower salary didn’t phase me.

For the first couple of years, I don’t think money really mattered that much to me—it was more about the experience. But when you're looking at the long term, it's worth asking: Would I actually be better off financially living in Europe instead of the US?

It’s an important question, and the answer might not be as straightforward as you think. So let’s take a closer look.

First, we’ll go over some of the key factors that affect your financial situation when living in Europe vs. the US. Then, we’ll compare 5 US cities and 5 European cities—looking at average incomes and cost of living—to see where you might be able to live more comfortably.

Tune in to hear the full breakdown!

👉Take the free quiz: Which European city should you move to? 🤔

Grab my free guide: 5 Exact Steps to Move Abroad

Website: jordangiberson.com
Instagram: @jordan.giberson

Transcript

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Is it viable for me to move to Europe and be able to make a decent living where I could be comfortable? I think, again, person to person, but I think that it's helpful to look at your situation and to be aware of your financial situation or potential financial situation in Europe versus the US. Hey, my name is Jordan Giberson. I'm a Texas girl living in thriving in London. The best thing I've ever done moving abroad, hands down, and I'm passionate about helping others do the same. Are you curious about finding a job abroad? You're in the right place, friend. I'll teach you the tried and true. Secrets of how to make moving abroad a reality for you and how to live a fulfilling life. Once you get there, we'll cover topics like choosing the best visa for you, how to get a job offer in another country, how to get over your fear of moving abroad, and how to live a life you love once you get there. This is the Move Abroad podcast. Are you interested in a move abroad? Well, I would think that maybe would be because you're listening to this podcast. So if you are interested in a move abroad, I have a free guide called The Five Exact Steps to Move Abroad. It's on my website, jordangiberson.com So if you're interested in getting that free guide, go over to my website jordangiberson.com and I'll send it over to your email. Hello, and welcome to another episode of the Move Abroad podcast. Thanks for joining me today. So today we're going to be talking about whether or not you would be financially better off if you stayed in the US versus if you moved to Europe. So. I'm super excited about today's podcast episode. I basically did a spreadsheet that shows all of the costs, like the main cost of living associated with being in the US versus in Europe. I compared five European cities and side notes. They're part of the top 10 European cities. I would recommend people move to. So you can go back and look at that podcast episode. It's episode 11, 10 best European cities to move to, if you're interested in looking at that podcast episode. So I compared five of the top European locations and all the costs associated and then compared it to five of the, what I think as the top five. US cities that you could be living in. So anyways, we do a cost comparison during this episode, so I'm super, super excited to run through all those costs. But to start us off, I thought that'd be helpful to first talk about some of the key points that you might need to consider when you're evaluating different financial aspects of living in the US versus Europe. And I will say that like most things, it really depends on lots of different factors for you. Based on your individual circumstances, your lifestyle preferences, your career opportunities that you might have in any given country. So here are the key points to consider when evaluating the financial aspects of living in the US versus Europe. There are eight of them to consider. So one is the cost of living. So this really varies a lot between the different US states and European countries. So generally. A lot of the major European cities like London, Paris, and Zurich, those tend to be a bit more expensive than a lot of US cities. But there are also a lot of really affordable options in Europe as well, particularly in Eastern and southern European countries. And I will say that if you're planning on getting a salaried job, the salaries in these. Eastern and Southern European countries tend to be a little bit lower. But if you're self-employed, for example, and you're earning money from the us from US customers, just as an example, you would definitely be making a lot more than the cost of living in these countries. Whereas if you're getting a salary, they tend to be a bit lower there. Versus in London, Pariss are, they might be a little bit higher. Again, it really depends on your specific. Individual careers in your circumstances, but cost of living. Definitely helpful to look into whenever you're considering your financial aspect of moving abroad. Number two, and we've already kind of alluded to this, is salary and employment opportunities. So salaries can really vary based on your profession and the industry that you're in. In the US there's certain sectors that might offer higher pay compared to Europe, but it really depends on the country and the specific job market. Number three to consider is taxes. So tax rates differ across both the US and Europe and some European countries have some higher income tax rates, but they might also offer more extensive social welfare programs like healthcare and education. So that brings us to number four to consider. So healthcare. In Europe, access to healthcare is often provided by the government through public healthcare systems. So this can be a really big advantage for those that prefer not to rely on private insurance or wanna face really high medical expenses in the us The healthcare costs can be substantial, and access to getting healthcare might depend on your employment status and insurance coverage. I have talked to so many Americans. Who talk about just the random copays and paying for prescriptions that are extremely high and things like that. Whereas in Europe, the costs are a lot lower for healthcare, and they still have really, really great healthcare systems. You might think that, oh, well, it's not as expensive and it doesn't come outta my pocket as much, so it's probably not as good. Of healthcare, and it's actually not true. The healthcare is actually quite good around Europe, so it's helpful to consider whenever we're thinking about financial aspects around moving abroad. Number five would be education. So if you have children or are considering having children, at some point, the education costs and quality of schools might be a significant factor. So some European countries offer free or low cost, higher education, whereas in the US college tuition can be very, very expensive. Again, it really depends. Country to country here in Europe, but something to consider. Number six is the currency exchange rates. This one is kind of an interesting one because there are fluctuations in the currency exchange rates that can impact your financial situation if you're earning income with one currency, but then have expenses in another. For example, uh, I send some of my pounds to my bank account in the US and I have some investments in the us so if the currency. Rates changes between the British pound versus the US dollar. That could impact my financial situation. So it's something to consider as well. Number seven is retirement and social security. So if you plan to retire in Europe, then understanding how your US retirement accounts and your social security benefits will be affected. It would be very, very. Crucial. So definitely something to look into, especially if you are nearing retirement. That would be something to look into. And then number eight is the visa and immigration requirements. So whenever you live in Europe, you are required to have a visa unless. You have a passport already for another country. So you have to follow the immigration regulations mi, which might have some costs associated with it. So definitely good to know what type of visa you would need if you are moving abroad. And again, it really depends on your individual situation. For instance, you'll have a different visa if you're going to be an entrepreneur in Europe versus if you want to have a nine to five job. So definitely helpful to consider. I will say that if you have a nine to five job, a lot of times companies will pay for this because they're hiring you and it's a part of the hiring cost to hiring you. But if you want any other type of E that's probably gonna come out of your pocket. So definitely. Something to consider if you are considering a move abroad. So those are the eight main factors that I would say to kind of figure out whether you'd be financially better off in the US or Europe. So they were cost of living, salary and employment opportunities, taxes, healthcare education, currency, exchange rate, retirement and social security, and then visa and immigration requirements. So with all that being said, I wanted to do a cost comparison for Europe versus the us and in order to do that, I did look at a salary, how much someone might be earning. Versus how much they would be spending in order to live there. So this was a super fun exercise. I really enjoyed doing it. And I will say, again, it really depends on your individual circumstances. We all have very different living standards. Some people might have families, some people might be solo. Some people might be a little bit earlier on in their career, not be making as much, but have lower, uh, lifestyle expectations versus someone who is a bit further along might have higher living expectations and might be able to make more income. Or maybe you have all the money in the world and so it doesn't really matter where you're living. Anyways, it's all very, very person to person. But for this exercise I focused on. A single woman who is a marketing manager moving to Europe. So I compared five different US cities all around the US to five different European cities all around Europe. And those locations are for the us. They were Austin, Texas, New York City, Nashville, Tennessee, Denver, Colorado, and Charlotte, North Carolina. And then for the Europe side, I focused on Madrid, Spain, London, England. Lisbon, Portugal, Amsterdam, the Netherlands, and then Berlin, Germany. So I compared five to five. So we could try to get a bit of a, a good comparison. So for this exercise, I just kind of made up a person. So I said there was a single person who was living in the US in one of these five cities in either Austin, Texas, New York City, Nashville, Tennessee, Denver, Colorado, or Charlotte, North Carolina. And I said that. Besides New York City, which has public transportation, I said that she would be owning a car and she would need to be paying the average monthly car payment, which is$620 per month. And she would also have to be paying the monthly cost to run that car, which is the average is$350 per month in order to run this car. And I just based it off of kind of a random car I. Based off of the 2020 Jeep Grand Cherokee with 12,000 miles or so. So that's what I based this example off of, and I said she was a marketing manager in the US looking to move to Europe also as a marketing manager. So I could kind of find the average salaries. To look at her income versus some of her costs that she would be having. And I also said that she would be looking for a one bedroom apartment in all these cities to compare the costs on a, I guess, more equal playing ground. And the different costs that I was looking at were housing. So the cost of a one bedroom apartment. The utilities. So these are basically utilities like electricity, heating, cooling, water, and garbage. I looked at transportation, so like I said, I did the car if they were in the US and then I did public transport for Europe except for New York City, which also would be public transportation. And some of the pieces that went into the car were the. Gas, the insurance, maintenance and parking fees throughout the month. I also looked at groceries, the cost of dining out and entertainment, healthcare, and other expenses, which included things like miscellaneous expenses like clothing, personal care items, and discretionary spending. Which obviously is very person to person, but those were the main things that I looked at for healthcare. I looked at things like copays and other additional medical expenses as if you already had health insurance, because in the US the health insurance is between seven and$8,000 per year. But I said that in this example, since she is a marketing manager, she probably is already having her insurance paid for by her company. So I just assumed that she already had medical insurance. In the us. So I did not account for that. And then I budgeted around$225 per month for additional healthcare expenses, like copays, other medical expenses, medications that she has to pay for, dentist appointments and anything around that. So that's what went into that one. So without further ado, we'll go into some of these costs and I will provide the spreadsheet so you can look at that. I'll include it on the blog on my website. So you go, you'll have to go look at the show notes or the summary of the podcast, but I'll outline some of these costs verbally so you can get a understanding of it. So finding the average salary for a marketing manager in all these places was really difficult because it, there's such a wide range. It'd be like the average salary is between$30,000 and$150,000, and I'm like, okay, great. That's like not really helpful. That's such a wide range, but, okay. So anyways, the ranges were quite large for the average salary, but I did my best to try to find the best average that I could. I won't go into all of the averages because. I don't think that it's gonna be helpful if I just start throwing out a bunch of random numbers at you. I also wanted to say that I took into consideration the salary after tax. So I will tell you the average monthly salary after taxes in the US cities versus Europe. So when I was looking at the monthly salary after taxes for Austin, New York, Nashville, Denver, and Charlotte, the average was about 5,920 US dollars. Per month after taxes, that would be your take home pay. Whereas in Europe, I calculate the same thing in Madrid, Spain, London, Lisbon, Amsterdam, and Berlin, and the average for a marketing manager came out to about 4,089. US dollars and I converted all of the currencies in all these countries to US dollars so that we could have an easy comparison. So basically it's in the US the take home would be 5,920. In Europe it'd be 4,089. So basically in the US you'd be earning more. So in Europe you would be earning about 70% of what you would be earning in the us. However, the costs in a lot of these European countries and cities were a lot lower. For example, you don't have to own a car. It's not necessary. There's public transportation, so that decreased the cost a lot. Phone bill for another random example is a lot lower in Europe versus the US It's a lot higher. So just random things like that, that actually your costs associated were a lot higher for. Oh, also healthcare is a really big cost in the US for medications, for copays. Those are things that in Europe, they don't have to worry about. So it's things like that that, is not necessarily apples to apples and all these things. So it is helpful to look at the cost of living. As well as a salary for sure. But it is really interesting to see kind of what we end up with as the difference in your income versus your cost of living and then what you're leftover afterwards. So I'll mention that at the very end. But basically, as I mentioned, all of the different categories were the income, so the monthly salary after taxes, and the different categories I looked at were housing, utilities, transportation, groceries, dining out, and entertainment, healthcare. Phone bill and other additional costs. And then I calculated the total cost that you would be having in each of these locations, and then the total savings that you would have. So basically, long story short, and I, I could go through all of these numbers. But I think it would be more helpful for you to just look at the cost comparisons rather than me just kind of running through the numbers. But I would say that some of the biggest takeaways for me were that the, like I said, the phone bill is a lot higher. It was about$70 per month on average for a phone bill per person. If it's an individual in each of the five US cities versus in Europe, it's about$20 per person per month, which is definitely on par. I think I pay 15 pounds per month, so that's about how much I'm paying is 20 US dollars per month or so. A little bit less actually. So that's. That was one thing that I found kind of interesting. Another thing that is quite obvious is the cost of transportation. So as we were talking about a little bit earlier, I was looking at the cost of owning a car. And basically the average car payment in the US per month is 620 US dollars. So that's 7,500 yearly. And the average monthly cost to run a car is$350. That includes maintenance. Gas, insurance and things like that. So that was what went into the cost. So the total monthly cost of transportation in the US is$970 per month, which was. High. I found that actually really surprising. And then in New York you would have the public transportation, so it's$127 per month. And then comparing that to Europe, that was one thing where Europe was really winning. And Madrid, Spain, the average monthly cost for public transportation was$43 compared to 970. I mean, that is a massive difference. Per month. And then in the UK it'd be$184. Lisbon, 43, Amsterdam 114, and Berlin, Germany 95. This again really depends on how many times, obviously you're using public transportation. The same goes in the states, how many miles you're driving. If you're driving two and from work two hours every day, then yeah, you're gas prices is probably gonna be a lot higher. So everything is very person to person. But in this little simulation, basically the cost of transportation is. So much higher in the US because you have the car, you have the car payments, you have all of the things that go with that, whereas public transport is a lot lower. Another factor that was quite different is obviously healthcare. So with copays and just the random payments that you have to make, if you have to go to the emergency room, that's obviously a massive cost. If you break your arm, if you have any like big medical thing that happens to you once every five years, if you kind of break that down per month to look at how much that would cost you per month on average. It's about 150 US dollars or so. I compare that to Europe where healthcare is completely free. Like for example, I had to get a CT scan and EKG and blood work done in London a couple years ago, and my cost was, it would've been about$2,000 in the US if I would've been in the us. But thank goodness I was over here, so I had$0 cost. So it's just things like that, that where there is a difference between. US cities and European cities. Again, I think it's really helpful if you actually look at the spreadsheet, so I'll definitely include that in the show notes. I also did wanna mention that I did not include any costs for children or pets. I just try to keep it as simple as possible because everyone's situation is so different. But I'm going to go ahead and go through kind of the final cost of everything. Looking at those five US cities, five European cities, so 10 cities in total, to have kind of an even comparison and looking at all those categories that we've already mentioned a couple times. So we'll go ahead and go to the final calculations for everything. Again, I think it would be really helpful if you look at the spreadsheet so you can see all the different costs associated with each of the categories that we've mentioned in each of these five European cities and five US cities. But basically in. Austin, Texas, New York City, Nashville, Tennessee, Denver, Colorado, and Charlotte, North Carolina. The average cost of living in these five US cities is 3,741 US dollars per month, and the average take home salary. After taxes is 5,920 US dollars. So then per month, the average monthly savings that you would have would be 2,179 US dollars. And then comparing that to the five European cities of Madrid, Spain. London, England, Lisbon, Portugal, Amsterdam, Netherlands, and Berlin, Germany. The average cost of living in these European cities would be$2,592, versus the average monthly salary would be 4,089 US dollars. That's after taxes, and then the average monthly. Savings that you would have would be 1,497 US dollars. So the difference in the average monthly savings that you would be taking into your savings account or investing somewhere would be$682 per month. So you would be saving an additional$682 per month if you lived in these five US cities versus these five European cities. So this would be$8,000 a year, which. It is a decent amount of money. But I did wanna note that in the US I was thinking you do have a lot of random one-off costs where you would have to use this emergency fund. So while you would be having$682 per month difference that you would be able to put in your pocket if you were to live in the us, I think there's also some really. Big potential emergency costs that you would have in the US versus Europe you wouldn't have to deal with. So those two big examples would be if you have a car or healthcare, you would potentially have to incur really big costs. For example, if you accidentally break your arm in the us, there would be some. Costs associated with that on top of what your insurance would pay, and then your car. If your transmission, for example, randomly went out, then that's gonna be a really big cost you're going to have to incur. And then this would have to, this would be both the US and Europe, but housing would also be a really big random cost. If your boiler went out, for example, or something random happened to your house where you really have to fix it, you get a massive leak in your roof and you have to redo your roofing or something like that. So car, healthcare and houses were kind of the. Big pieces that I was like, oh, you might have to pay really big costs, and two these, the car and healthcare would both be in the us so this$682 per month that you would be saving. I mean, realistically, you might have to be dipping into that quite a bit to pay for these random one off costs that are really, really high cost that you might have to pay per year. I'm not saying that's necessarily gonna happen, but I was just thinking about that and I was like, well, yeah, you are saving$682 per month. So it is a big chunk of money. If that adds up over time. But I think there are other considerations around that where you're not really winning that much more, I think in Europe versus the US because the cost of living is a lot lower in Europe, in a lot of European cities versus a lot of US cities. But again, it's so city to city. Obviously, if you're moving from. Rural Alabama, and then you're wanting to move to London, England, like, yeah, the cost of living is a lot higher for everything and the salaries, they might not be as high as what you could potentially get in rural Alabama. I don't know. So it's just, you definitely have to look at this person to person, but I do think that it is actually quite comparable because of the random. Things like transport or healthcare or phone plans that actually make the cost of living drop a lot lower in Europe. And actually it's kind of like, I think that it actually is a lot more equal and I think you nec you wouldn't necessarily be a lot worse off in Europe than you would be in the us. So with all that being said, I think I just wanted to say that whether you're financially better off in the US versus Europe, it's so person to person, I couldn't tell you. I think you'd have to do your own cost analysis and look at your own industry and salary that you have and what expenses you would expect to pay and what your expectations around lifestyle would be. So definitely person to person. A hundred percent, just like a lot of things are. However, I do think that you could easily move over to Europe and still have a similar lifestyle and still be able to get a similar salary and be able to live the life that you want. And I think also, like whenever I was moving to London, I had a lot of people that were like, whenever you're first starting out in your career in London, the salaries are so much lower than the us You'd be way better off waiting and moving to London after you've been working in the US for a few years. Whenever. You can move to London and your salary could be a lot higher. And I was like, you know what? I literally couldn't care less. Like I don't care. I know that it matters, but at the same time, I care way more about moving there and living my life there. And money is not the most important thing to me. You need to be like financially aware of your situation and especially long term, and make sure you're saving for retirement and investing for retirement, and thinking about like. Saving up for education if that's something that you need to for your kids and thinking about anyways. I think you need to think about financial aspects in the future, and I think you need to be thoughtful about that. But at the same time, I'm not gonna be like, oh, I'm not gonna move to Europe because I might save 600 extra dollars per month. Like I. I mean to each their own. Maybe you think that way, but I think a lot of it comes down to like, is it viable for me to move to Europe and be able to make a decent living where I could be comfortable, as comfortable as I am in the States? I think. Again, person to person. But I think that it's helpful to look at your situation and to be aware of your financial situation or potential financial situation in Europe versus the us, but maybe that's your deciding factor, or maybe it's not. I wouldn't make it my deciding factor, but I think it's just helpful to be aware of. So anyways, with all that being said, thank you for listening to another episode of the Move Abroad podcast. I hope that this episode was helpful for you. If you're interested in looking at the cost analysis that I had, my little spreadsheet that I put together, then that will be in the show notes. So that will be on my website, Jordan gibon.com and it will be episode 17, uh, which is super exciting. So. If you found this episode helpful, I would love it if you left me a review. If you left me a five star rating on Spotify or Apple Podcasts or wherever you're listening to this podcast, then I would love that. I really appreciate that. And if you are interested in a move abroad, I have a free guide called The Five Exact Steps to Move Abroad. It's on my website, Jordan gibson.com. It's at the very top banner of my website. You really can't miss it. If you wanna follow me on Instagram, I am jordangiberson on Instagram. So go will give me a follow over there. And if you're interested in sending me a message and just saying hello that you're enjoying the podcast, I would love that as well. So anyways, that's it for me for today's episode, but hope you have a great day and looking forward to seeing you again next week. Same time, same place. See you then.