How Much Is Needed to Live Comfortably in Different Parts of the World
The cost of living can vary significantly depending on where you reside. The expenses associated with comfortable living can differ drastically from one country to another, and even within the same country, depending on the city or town you choose to live in. This article aims to provide insights into the cost of living in various parts of the world, focusing on the different factors that contribute to the overall expenses of a comfortable lifestyle.
Understanding the Cost of Living
The cost of living is a broad term that can encompass a range of expenses, from housing, food, utilities, healthcare, transportation, and education. However, it is essential to understand that the cost of living also varies based on personal circumstances, such as the number of family members, lifestyle choices, and living preferences.
India: Upper Middle Class Lifestyle
Rs 45,000 (approximately $550) per earning member per month is generally considered a good starting point for an upper-middle class lifestyle in most Indian cities. This amount can quickly rise in very expensive cities, such as Mumbai, where the cost of a 2 BHK apartment can surpass Rs 40,000 per month in rental fees alone.
United States (US)
Living in the US is significantly more costly than in many other parts of the world. In the high-cost areas of New York, San Francisco, and Los Angeles, the cost of living can be exponentially higher than in smaller towns like Portland, Oregon.
Example: In the US, a family of four had a total annual cost of around $100,000 for a very basic lifestyle, while with some additional expenses like travel, kids' activities, and college funds, the yearly cost was around $150,000.
Fixing costs, such as the mortgage, play a significant role in the total annual expense, amounting to about $50,000 in this example. Despite the high cost of living, the fact that both family members are working and able to work from home helps to manage the expenses better.
Philippines: Basic Living
In the Philippines, the government states that a family of six needs about ?8,500 per month (around $85) to live decently. However, in reality, this amount falls short, with an estimated additional ?2,571 (approximately $23) needed per day. An electrician in the Philippines can charge around ?750 (about $12) for a simple job, leaving an apprentice behind for a seven-hour job. Additionally, minimum wage is ?5 per day for a 12-hour shift.
The minimum estimated cost for a decent living for expats is ?15,000 per month. This includes basic necessities such as air conditioning, a motorcycle, and three meals a day. For those with higher spending habits, this can easily double, reflecting the cost of a more comfortable lifestyle.
Factors Influencing Cost of Living
Economic Factors
Several economic factors contribute to the cost of living, including inflation rates, GDP growth, and the strength of the local currency. For example, inflation rates in India and the Philippines can affect daily costs significantly. Meanwhile, in high-cost countries like the US, GDP growth and currency strength play key roles in maintaining a high cost of living.
Purchasing Power
Purchasing power varies based on the local cost of goods and services. In areas where wages are lower, the purchasing power is also lower, meaning that the same amount of money can buy fewer goods and services.
Lifestyle Choices
The lifestyle choices of individuals also play a significant role. For instance, the breakdown of spending on various necessities like housing, food, utilities, and transportation can vary significantly between a family and an individual, or between those with and without children.
Conclusion
The cost of living and what it takes to live comfortably is highly dependent on the location and personal circumstances. While some areas, such as the US and certain cities in India, have higher costs, others, such as smaller towns or rural areas in the Philippines, can have a more manageable cost of living. Understanding the factors that influence the cost of living can help individuals and families plan their budget more effectively, ensuring they can maintain an adequate standard of living.