How to budget for a move abroad

Step 1, scale your income by the price ratio

The core calculation is simple. To keep the same standard of living, the income you need in the destination equals your current income multiplied by the ratio of the two price levels:

needed income = current income × (destination index ÷ origin index)

The cost-of-living calculator does this for you and breaks the difference down by category. If the destination index is higher, you need a raise just to stand still; if it is lower, your money goes further.

Step 2, decide: earning locally or bringing income

Your strategy flips depending on where your money comes from:

• Earning locally - optimise for value, not just low cost. A higher-paying expensive country can beat a cheap low-paying one. Use the best-value ranking.
• Bringing a fixed income - a remote salary, pension or savings does not rise with local wages, so optimise for low cost. The cheapest countries win.
• A mix - weight the two by how much of your income is local versus portable.

Step 3, adjust for the city, not just the country

The indices are national averages, and the capital is almost always pricier, especially for rent. Build your budget around the specific city you'll live in, not the country figure. A country that looks cheap nationally can be expensive in its one big city, so always check housing for your actual destination.

Step 4, build the category budget

Translate the scaled income into a real budget, heaviest line first:

• Rent, the largest item; weight it most. See rent and housing.
• Groceries and utilities, steady monthly costs that the category indices capture well.
• Transport, depends heavily on whether you'll drive or use public transit.
• Healthcare, check what the destination's public system covers before budgeting out-of-pocket.
• One-off moving costs, deposits, flights, shipping, which the indices do not include.

Step 5, sanity-check and add a margin

The price-level method gives a sound directional estimate, but no model captures your exact life. Add a margin for the things averages miss, a pricier neighbourhood, a different lifestyle, currency movements, and the first months when you have not yet found the cheapest options. Treat the calculator's number as a floor to clear, not a precise target.

A worked example, end to end

Suppose you net thirty thousand euros a year where you live now, in a country with a cost-of-living index of 100, and you are considering a country with an index of 80. Scaling by the price ratio, you would need about twenty-four thousand euros there to keep the same standard of living, six thousand less, because the destination is roughly twenty per cent cheaper. If you are bringing your current income with you, that is a real gain in spending power. If instead you will take a local job, the question flips: can you earn at least twenty-four thousand locally? If the going rate for your work is higher, you come out ahead; if it is lower, the cheaper prices may not fully compensate.

Now stress-test that number. The index is a national average, so if you are moving to the capital, raise your housing line, the biggest part of the budget, above what the country figure implies. Add the one-off costs the index never captures: a deposit, flights, shipping, the first weeks before you have found the cheapest local options. Then add a margin for the simple fact that no average is your life. The scaled figure is best treated as a floor to clear comfortably, not a precise target to hit. Run it through the calculator, sanity-check the housing assumption for your actual city, and you will have a budget grounded in real price data rather than guesswork, which is the entire point of comparing the cost of living before you move.

The bottom line

A sound move budget is the scaled-income figure, adjusted for your city, padded for one-off costs, and stress-tested with a margin. Decide first whether you are bringing income or earning locally, because that flips the whole calculation between optimising for low cost and optimising for value. Run the numbers through the calculator, check the housing assumption for your actual destination, and treat the result as a floor to clear rather than a target to hit.