The amount of money needed to live comfortably differs from City, State, country and region. I have been aware of this for a long time as I have traveled quite a lot, but I still haven’t managed to completely answer the question of why the cost of the same service or product differs so much according to location.
I remember travelling to Norway several times and the price of alcohol was about 6 times more expensive than it was in the U.K. When I first moved to the U.S.A., I could buy a carton of cigarettes in my State for less than the duty free price at the airport.
The most affordable State in the U.S.A. according to studies is Mississippi, followed by Indiana, and Michigan. Most studies use housing costs (rent and ownership), essentials such as food, healthcare and clothing. The studies also take taxes into account. The most expensive State to live in is Hawaii, followed by New York and California.
Unless you are independently wealthy or funded by other means such as pensions, self employment, passive income etc, then the amount that can be earned from work needs to be considered before moving to a more affordable State.
As a rough guide, the median household Income for the above States in 2015 was –
MS $40,593 (The least expensive State).
HI $73,486 (The most expensive State).
A more in-depth study can be found HERE
The issue is that the same goods and services can differ in price, either higher or lower depending on each State, this difference adjusts the true national value of your household income. I understand that many people from the higher paid States move out to a State with a lower cost of living when they retire with a decent occupational pension, and this effectively gives them a pension raise. As house prices are usually in line with the cost of living, the new pensioner can sell a house which is probably paid for, or mostly paid for, take the cash and buy an upgraded house for the same price in the cheaper State.
People with more modest pensions can do the same, but the interesting thing is that these people would be even better off financially if they moved abroad. Some studies state that after looking at the cost of living in various countries, a couple with approximately $1200 per month pension could live a reasonably comfortable life in several desirable countries around the world, including some in Europe. A person could live very well on $1200 a month in the 3rd world but I doubt that this would be attractive to most.
Popular and emerging locations include Slovenia, Crete, certain places in France and Italy, Hungary, Portugal, and Malta. This is not an exhaustive list. All of the countries listed have been reported to be friendly to foreigners.
I find it interesting that a person on a modest fixed income from the U.S. could move to a desirable Mediterranean/ European location and live comfortably. I would think that learning the language would help with integration, especially in France as I have found that the French mostly know English but refuse to speak it. I suppose that is fair, as we expect people to communicate in English in the English speaking countries.
Why is there such a difference in the cost of living between countries and even our own country to a lesser degree?. I am still trying to figure this out, I suspect that it may have something to do with control and exploitation, but i’m open to all opinions.
We are paying much more for the same services and goods in the U.S.A. than some other countries, but we are still much better off price wise than Northern Europe and the U.K. in most respects.
We are lucky if we have independent funds, however modest, as according to studies the global median income is $1,225 per year and to make it into the top 1% of earners worldwide you only need $34,000 per year. This still doesn’t answer the price disparity question but it does give a lot of us more options than we originally thought that we had.