10 Best and Worst Countries for Saving Money
Thinking about living abroad, but still want to add to your bottom line? Read on to find out which countries to consider—and which you should skip.
Portugal is becoming more and more popular with tourists, thanks in part to well-priced direct flights from cities on the East Coast of the United States. Though this drives some costs up, Don Orban, founder and CEO of Midwest Retirement Advisors, says you might be surprised at how much money you could save by living in this country. Compared to other countries in Europe, Portugal has one of the lowest cost of living including rent, utilities, and food costs. “You can spend the afternoon at a local café for a handful of euros, where in other countries it could cost you twice as much,” he continues. “While Portugal has great infrastructure, its economy isn’t as developed as other places in Europe and also has lower wages, which contribute to the low cost of living. If you move to Portugal, you can expect to save a lot of money without even trying,” he continues. Find out the 10 best places to live for under $40,000 a year.
Worst: The Bahamas
When some people imagine their ideal destination for retirement, the bright, sunny skies and the opaque blue waters of the Bahamas instantly come to mind. But before you head south, Orban warns against how expensive island-living can be. Especially in the Bahamas, since it is one of the wealthiest of Caribbean countries. How come? It’s popular for tourists, which always increases the cost of living for locals. “Like other island countries, a number of goods must be imported; when you factor the cost of transporting the goods and value-added taxes, the price tags quickly rise,” he explains. In fact, according to one survey, the purchasing power of the average salary in the Bahamas is lower than New York City, Orban shares. “This means if you live in the Bahamas, the same amount of goods will cost even more than in one of America’s most expensive cities,” he explains. “It’s also possible that you’ll want to spend more time at the beach than working, which can make it hard to save money.” Find out the 15 top places around the world to retire.
Not only does Peru offer the metropolitan and beautiful city of Lima and ancient Inca wonders, including Machu Picchu, but you can also save a ton of money, according to Orban. “The cost of property is extremely low, so you could buy or rent a house for very reasonable prices,” he explains. And because the cities have reliable public transportation (or Uber!), Orban says most residents choose to go car-less, which can be a huge saving. “If you want to save even more money while living in Peru, perfect the art of haggling,” Orban says. “The traditional markets sell various foods and goods, which you may be able to get for a lower price if you haggle correctly,” he recommends.
The jaw-dropping landscape goes on seemingly endlessly and the Northern Lights illuminate your way… but Iceland doesn’t do wonders for your budget. Orban explains the cost of living in Iceland is a staggering 42 percent higher than in the United States, with rent alone falling around 20 percent higher. “Because Iceland is an island, many foods and products have to be imported, raising costs considerably,” he adds. In fact, the capital, Reykjavík, is the 14th most expensive city in the world and the sixth most expensive in Europe, he shares. Making matters worse, Iceland is currently going through a tourism boom, so supply and demand are increasing the cost of labor, making hotels, restaurants, and housing more expensive for citizens and visitors. Check out these 15 cheap towns where you would want to retire.
It may not always seem like it when you’re struggling to pay off your credit card every month, but America is one of the best countries for making and saving money. That’s because America has one of the highest GDPs (gross domestic products) rates in the world and one of the strongest economies, according to Matt Dworetsky, president of Dworetsky Financial. “If you choose a state with a low cost of living, like Tennessee or Georgia, you could save a lot of extra money each year,” he explains. Another bonus? “Most major cities have great public transportation which eliminates the need for a car and related costs.”
Swedish citizens get plenty of perks: universal health care, a generous maternity and paternity leave, and generally, safe, clean streets. But they come at a cost. According to Dworetsky, Sweden has an incredibly high personal income tax rate, which reached a record high in 2017 at 61.85 percent. He also shares it’s capital, Stockholm, is the most expensive city in the country with exorbitant housing costs. “Alcohol has a high tax in Sweden as well—vodka has a 40 percent tax and wine has 14 percent—so if you enjoy the occasional night out, it’ll cost you,” he explains. “It can be hard to grow your savings account while living in Sweden since you’ll be paying more than average for basic goods and services.”
Dworetsky says up until 2015, China was the fastest-growing major economy on the planet and remains in second place today. If you set up shop in this vast Asian nation, you’ll find the everyday cost of living to be lower than in America and much of Europe, which attracts budget-conscious professionals. “The cost of labor in China is very low, which helps keep the cost of goods down. With affordable housing, food, and leisure activities throughout the country, it is very possible to live your ideal lifestyle while still bulking up your bank account in China,” he explains.
Sorry, while the ideal life would include smelly cheese, an oversized baguette and a cheap bottle of red, saving money isn’t easy in the City of Lights—or anywhere in France, according to Dworetsky. Paris is one of the most expensive cities in the world with high real estate costs, as well as pricier than average public transportation and basic goods and services. Moving out of the city doesn’t mean you’ll add to your bottom line, either, since rates of taxes and mortgages vary greatly. “Like anywhere, the average French salary varies by location, but France taxes their workers more than most countries in Europe,” he explains.
With many of attractions—from mountains and beaches to coffee farms—the cost of living in this South American nation is 54 percent lower than in the United States. The savings don’t stop there either: local purchasing power is 53 percent lower, rent is a whopping 93 percent lower, and groceries are 78 percent cheaper. It’s considered the most affordable country on the continent, with top metro contenders being Medellin, Cali, and Bogota. You’ll never guess which American city was named the best for retirees.
The British territory of Bermuda is popular with tourists, but likely isn’t a destination you’ll want to retire to, considering it has a 100 percent higher cost of living than the United States and a cost of living index of 123.57. You can thank the steep price tags to the location of the country, since being on an island means many goods are imported, which raises the dollars required. In fact, Hamilton, Bermuda was named the most expensive city in the world—with only 1,000 residents to front the cost, according to the Numbeo cost of living index. Next. don’t miss the 10 best small towns in America to retire.