Cost of living in Portugal versus the USA

Cost of living in Portugal versus the USA

There’s surely a reason why American expats 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. 

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 favorable destination for expats 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. 

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.

Transport cost

The transport system in both countries is well-placed and managed. Most big cities in the United States will have better public transport, including buses, trams, trains, and taxis. 

Similarly, most cities and municipalities in Portugal are interconnected through the railway system, and even smaller villages have the facility of public transport. In Portugal, the monthly transportation pass costs around €40 ($41.45), while it costs €67.56 ($70) in the United States.

Education

Education in the United States can be significantly more expensive than in Portugal. Foreign residents and Portuguese nationals have free access to public schools in Portugal, and private institutions are substantially less costly. 

In Portugal, an international or private education costs an average of €10,632 ($11,000) yearly, compared to €33,830 ($35,000) in the United States. International Schools in Portugal are at par with any private schooling, and the curricula are designed specifically keeping expats in mind.

Healthcare

The United States healthcare system is incredible for those with insurance or savings to pay privately. However, obtaining adequate care will be challenging if you cannot pay your bills. 

The government runs the healthcare system in Portugal, which is affordable with little to no fee. A doctor’s visit in Portugal may cost up to €50 ($51.63), whereas it costs €106 ($110) in the US. Compared to the United States, Portugal’s healthcare system is ranked 12th best by the World Health Organization.

Since June 2022, public healthcare in Portugal has been free for all legal residents. Expats have complete faith in the healthcare system, and a lot of people do not rely on insurance either. However, Americans take their insurance seriously for many reasons besides the fact that only an ambulance service can cost up to €1,200 ($1,239). 
Is Lisbon more expensive than New York?

The cost of living in Lisbon is 65% cheaper than in New York. As per official data from Numbeo, you would need approximately €8,898 ($9,193) to maintain the same standard of living as someone living in Lisbon with €3,600 ($3,735). That’s a huge difference, isn’t it? 

Higher consumer prices, rent prices, and higher grocery prices in New York make it an incredibly expensive place. For example, the cost of living for one person in Lisbon is €1,220 ($1,263), whereas, in New York, it would cost around €3,444 ($3,563).

Is the Algarve more expensive than California?

California is twice as expensive as the Algarve region. If you live in California, you will pay 33.6% more for transportation, more than double for groceries, and twice as more for housing. 

While an average local might disagree that the cost of living in the Algarve is quite affordable, expats find it to be. A couple can spend €1,500 ($1,547) per month and live comfortably. However, it also depends from person to person because of different preferences. 

Is it worth the cost of living in Portugal?

It’s difficult to conclude only based on the cost of living in Portugal vs. the USA without knowing what you value in life. If you value peace, serenity, and a low cost of living, Portugal is absolutely worth it. Expats have solid reasoning to be relocating from the United States! 

The above comparison between the cost of living in Portugal versus the USA justifies that Portugal is one of the most budget-friendly countries in Western Europe. Due to reduced accommodation expenditures, you will pay well over 60% less than what you would in the United States. 

Portugal is a place to live if you want professional opportunities, beautiful weather, and a slower pace of life. On the other hand, if you are easily frustrated by bureaucracy or desire a higher salary bracket, it may not be the best place for you