COST OF LIVING: USA VERSUS GERMANY

A question I get a lot, particularly from German friends, is if living here in Karlsruhe is more expensive than The States. This is hard to answer, as the USA offers quite the range of living capacities (Germany, too). To make an honest comparison, I can only compare what I know, which are the cities of Houston, Austin, and Karlsruhe. My hypothetical life in Houston would involve me at an entry-level PR salary living in an apartment in central Houston, Texas.

From my experience, living in the US is cheaper than living in Germany.

Here’s Why:

Food: My grocery bills just ring up higher. Whether it’s the avocados and beef or the Coca-Cola and ice cream, it always seems to cost more. The discount groceries in Germany provide an outlet, but some things just cost more. Exceptions: onions, apples, juices.

Consumer Goods: In simple theories, clothes, electronics, toys, etc. are often priced the same as in the US, but in Euros. So, if a camera is $300, it will be €300, which is actually 30%+ more for expats.

Taxes: In Germany, when all is said and done at the end of a full work year, a solid 40 percent of my salary is gone. [German Tax Calculator] In the US, I would pay between 15-25 percent. However, my German taxes also ensure that I am health insured and it’s spectacular insurance. At the end of the year we also files taxes just as we would in the US but using a slightly different form than the 1040 or 1040A they use in the states.

Night Life: Going out in the US is just plain cheaper. There are always great drink specials and affordable cocktails. Germany, you are best sticking to beer and even that can cost you 2-5 €. Oh how I sometimes long for dollar beer nights and Texas Teas. However, in Germany, bars and clubs stay open past 2 a.m., which Texas law forbids.

Cell Phone: When you sign a 2 year contract in Germany, don’t expect a free or discounted smartphone as a part of the deal. The German cell phones run with the idea we had years ago in the US with free talk among users with the same carrier, etc. It’s just different and I feel like I don’t get the same bang for my buck with data plans and SMS packages. Yes, pay-as-you-go is cheap, but it’s cheap(er) in the US, too.

Contradicting Factors:

Rent: My rent is significantly cheaper living well-located in the city here, than living in “inside-the-loop” in Houston. In fact, I would pay $400+ more to live well located in Houston. However, my apartment is much-older, has no air-conditioning, no dryer, no elevator, old kitchen appliances, etc.

Alcohol: In stores (not out, as mentioned earlier), you can buy liquor and wine on the mega-cheap and often the wine’s are dang good, too.

Other Factors (that don’t quite apply to me):

Driving: Owning and driving an automobile is much cheaper in the US. There are more affordable vehicles, more affordable insurance, cheaper gas, easier to obtain a driver’s license, etc. If I stayed here forever, an automatic, precious new smart car would have to be in the books though. Although the public transport is spectacular and I love the freedom I feel on my bike, sometimes you just need a freaking car.

Expatistan, provides a crowd-sourced cost of living index where you can compare hundreds of cities worldwide. In this case, Expatistan agrees with me. Living in Karlsruhe is 28% more expensive than living in Houston, and it’s not even an expensive German city! Perform your own comparison here.

Cost of Living COST OF LIVING: USA VERSUS GERMANY

**These opinions are entirely my own and from my own experience living in the US and abroad. This is obviously a simple breakdown, but I live a simple life here as a single independent, so that’s what you get.**

What’s your experiences with prices and cost-of-living abroad? Did your Expatistan results surprise you?

UPDATE: I’ve learned a lot since doing this comparison and plan on doing an update soon. Meanwhile, I’ve detailed my cost of living in Karlsruhe, Germany. Costs will go up significantly when I move to Munich and I plan on providing a similar detail there, too.

  • http://keepingupwiththecotes.blogspot.com Casey

    Such a great post!! I’ve had a few bloggers email me asking about the cost of living difference, and I never thought to post about it. I might just have to borrow this idea…with credit to your genius mind of course. That website is great! I totally looked up how much living in Wiesbaden (well, I had to use the Frankfurt option, but close enough) to living in Greensboro, NC and it’s 54% more expensive living here in Germany! No wonder we’re broke!!!! lol Dear Lord, I need wine.

    • http://MySwissChocolateLife.blogspot.ch MySwissChocolateLife

      Thanks for sharing your experience and this comparison. This information is very helpful for my boyfriend’s family, who consider moving to Europe from The States;)

      • http://parisandverona.wordpress.com Amy

        I did a comparison for Edinburgh (where I study normally) and Paris (where I am now) and the housing prices are 97% more expensive – Paris is 33% in general. I want to weep.

        • http://confuzzledom.wordpress.com bevchen

          I compared Karlsruhe with the nearest city to my home (Newcastle) and was told Karlsruhe is 4% cheaper, but also that it’s a complete guess because they have next to no information for Newcastle. Hmmm.

          Personally, I think grocery shopping in Germany is more expensive than in the UK purely because shops on brands in the UK are just soo stupidly cheap. Aldi etc. go some way to redress the balance, but even there you can’t get a tin of new potatoes for 16p (about 19 euro cents). Not that I buy potatoes in tins, it’s just an example ;-)

          • http://ifsandsandbutts.com ifs ands & butts

            You can add in the info for Newcastle and help the crowdsourcing :) I tried to remember the prices I know well here in KA. Haha and I love your potatoes example. Aldi does definitely help cushion it, but their selection is just SO random and the produce is so hit or (usually) miss.

          • http://confuzzledom.wordpress.com bevchen

            I actually added a few things I remember/know from Newcastle and now Karlsruhe is suddenly 8% more expensive! Haha. I don’t know about stuff like housing prices though cos I still lived with my dad when I was there and even if I knew how much his house cost he doesn’t actually live IN Newcastle itself.

          • Sabine

            I can’t agree with everything. I am German and currently live in the states and I have to say that grocery shopping is way more expensive over here. Prices for fruits and vegetables, juice and other healthy foods is much higher than in Germany. I never went grocery shopping in Germany and paid more than 100 euros. Here however I easily spend 200-300 dollars once a week. Also, we pay 180 dollars for two cell phone contracts. In Germany, I paid 18 euros a month for my prepaid phone with 500 free minutes/texts and unlimited data. Same goes for internet and tv. If you want both, that’s at least another 100 dollars a month. One thing you didn’t mention are health care costs. I know the system is changing here in the states but it’s still very expensive and you have all those deductibles and copays that you don’t have in Germany. And although gas prices are much higher, German cars are way more gas efficient than US cars. My neighbor was bragging about her hybrid and that it gets 40 mpg but that’s kind of standard in Germany. Altogether, I will eventually move back to Germany because in my opinion life there is simply better and more secure.

        • http://ifsandsandbutts.com ifs ands & butts

          Hits ya where it hurts, doesn’t it? However, you get to live in PARIS!!!

      • http://ifsandsandbutts.com ifs ands & butts

        Oh wow, that sure is exciting!!

    • http://ifsandsandbutts.com ifs ands & butts

      At LEAST the wine is cheaper. Except, it maybe doesn’t end up being cheaper because I sure drink a lot of it here…

  • helenesula

    wow, this is really interesting and helpful! Since I am thinking about moving abroad we need to SAVE up. but it’s worth it for the experience. seriously awesome post!

    • http://le-grand-monde.blogspot.com Niken

      compare that to indonesian currency. haha,,
      In Indonesia, you’ll feel everything is extremely cheaper if you’re an expat.

      • http://ifsandsandbutts.com ifs ands & butts

        That must be a SPECTACULAR feeling!

    • http://ifsandsandbutts.com ifs ands & butts

      Yes definitely just save – I always find myself spending money just because it’s like well you can only do this once! Except now that I’ve been here over a year I’ve done things more than once… but still, too hard to turn down opportunities! And so many random things you have to pay for that you forget – visas, lost crap, broken crap, etc.

  • http://twitter.com/mstarr1188 Megan (@mstarr1188)

    i think it sounds pretty accurate. norway is wayyyy more expensive than anywhere in the US…or the rest of europe for that matter. they tax quite high here too. and you get health insurance included in your taxes. but i think the health insurance is subpar. norwegians dont…but they have never experienced both sides. i paid significantly less in the US for my insurance through my job than i pay in taxes here.

    to get your drivers license in norway it is roughly $6,000. enough said ;)

    by the way, when i lived in germany in the 80s it was ridiculously cheaper than living in the US. how times change ;)

    • http://ifsandsandbutts.com ifs ands & butts

      OH yeah, I definitely can’t talk – I just looked and Oslo is 118% more expensive than Houston – just unbelievable! I couldn’t manage it. I think the license in Germany is over $2000 and I thought that was bad. I could switch my American license easily to a German one, but right now I still have no real interest in driving here besides driving once on the Autobahn.

      And that is crazy – times certainly have changed! I wonder if it has to do with the Euro. I don’t know how the US manages to keep everything so low but I guess I can’t complain. I bought my mom a big brand German knife for cheaper in the US than I could have got it in Germany.

      Prices are weird.

  • http://cocalores.blogspot.com Anja

    You’re right, Germany really isn’t the cheapest place to live – but have you ever been to Switzerland? I’m only saying: we paid about 8€ for our starbucks coffee. Very sobering experience! ;-)

    • http://ifsandsandbutts.com ifs ands & butts

      Oh yes, Switzerland is brutal. I traveled there once and forgot my tennis shoes and figured I’d just buy some since I needed some anyway. A pair of Nike trainers was 300CHF!! Unreal… I live off doner kebab when I’m there, which still costs 9 CHF.

  • http://landofcandycanes.blogspot.com Katrin

    I absolutely agree, a lot of stuff is cheaper in America. Going out to eat is cheaper, gas is cheaper, rent is cheaper. At least where we live. But buying beer in the store is cheaper in Germany. :)
    David was so surprised when I told him what I had to pay to get my driver’s license in Germany!

    • http://svenja-happybluebird.blogspot.com/ Svenja Schoening

      ha, what a cool tool :-) My cities seem not to be part of it, but I do like the idea of an open source tool to compare any city you might want to move to. Thanks for sharing.

      xx

      • http://ifsandsandbutts.com ifs ands & butts

        maybe you can add yours in :)

    • http://ifsandsandbutts.com ifs ands & butts

      And the beer is better :) but yes in general, it always surprises me how much cheaper it is in the US – and also how many more options there are at the grocery stores and such.

  • http://oneroadtraveler.wordpress.com haileyhiggs

    I think it definitely depends on where in the US… We were blessed to live in the great state of Texas where many things are much cheaper.. but my mom is in San Diego and brother is in New York and holy moly are those cities crazy expensive in every aspect.

    • http://www.craftbotic.com Rosie

      I find things for sewing and crafts a lot more expensive, especially fabric. Beer, cigarettes and wine may be cheaper(and nicer….except the smoking) than the uk, but I resent what you pay for fresh food and shoes! Great post idea. Xx

      • http://ifsandsandbutts.com ifs ands & butts

        Yes all things crafty are so much more expensive! I always wanted to buy them for the kids when I was an au pair but then I’d realize, ya, don’t make enough for this haha. And such a good point, Germany does have some REALLY cheap shoes. Then again, I can’t bring myself to buying them because I worry about the comfort and quality.

        • Ian

          Hello Marshall,

          Many thanks for your reply.

          Having lived in Germany for many years, initially with the US military and then as civilians, my wife and I are familiar with many of the aspects of living in Germany you cited.

          I’m curious about the taxes you have had to pay. That tax had to be paid to the German authorities for your wife’s income earned in Germany makes sense. However, it is my understanding that if your US income is subject to US tax, then, by treaty, it is not subject to German taxes. This arrangement avoids double taxation. Am I correct?

          Amberg/Opf is about 70km east of Nürnberg off of the A6 (E50) Autobahn. I am somewhat familiar with Erding as it is the home of the famous Erdinger Weizen. I’m not a Weizen drinker, but Erdinger was the quaff of choice for all of my German friends.

          Best regards,

          Ian

    • http://ifsandsandbutts.com ifs ands & butts

      This is true, but definitely why I just compared Houston and Karlsruhe. I was still surprised though since Houston is much larger. If I compared Munich or something, it’d be even more. The rent there in the city is really high, yet the wages are lower than a comparative US city. Pretty crazy.

  • Ashley Abroad

    I live in a fairly expensive town in Michigan but Paris is MUCH more expensive. Even going north to Brussels and the prices are cut in half. Paris, even for Europe, is just super pricy!

    • http://pinkparliament.wordpress.com pinkparliament

      Okay, first off. (As usual) I love this post! 1. It came at perfect timing, as I was actually JUST debating with an American who was trying to convince a soon to be expat to just buy clothes here. NO. They are so much more expensive, add the tax rate and conversion… just pay the 60 bucks and bring a whole extra suitcase. haha 2. Takes are just plain insane. But, I did get a completely free cell phone with a German contract. In fact, I got the iphone 5, which at home usually would never be given free. Thanks for the website, that will be fun to compare my hometown with Dorfen in!!

      • http://ifsandsandbutts.com ifs ands & butts

        Sometimes buying clothes here isn’t so bad, like 1982 and Primark are SO cheap and H&M is totally reasonable. But yeah, the US is definitely cheaper with WAY more selection of cheaper. How did you get it free? Are you not paying for the phone monthly? That’s what I was going to do but instead just bought a Nexus 4 unlocked and outright. Anyways, the website is SO entertaining to browse! Glad you enjoy

    • http://ifsandsandbutts.com ifs ands & butts

      Oh gosh, I cannot imagine – especially Paris on an au pair salary. Well maybe (hopefully) they compensate for the more expensive place because I struggled going out in cheap Karlsruhe on mine. Gotta say though, you get what you pay for with Paris :)

  • http://itsabouttakingthejourney.blogspot.de Dena Barrie

    Thanks for the post! My husband and I were just discussing if living in Germany cost us more…I said yes, he no so you just helped me prove my point!

    • http://waysofwanderers.com/ Jessica

      Great breakdown! I’m living in Thailand temporarily, which is, obviously, much cheaper than living in Canada. Maybe i was naive, but I was so excited about how inexpensive everything was here at first, but then I realized that the quality is on par with the price. Am I really saving that much money if I have to buy 5 tank tops over the course of 6 months because they keep falling apart in the wash, rather than just buying one decent one in Canada?

      • http://ifsandsandbutts.com ifs ands & butts

        hahahahaha that is a good point! But then again with tank tops, I feel like they always wear out or get stained or something, so maybe it’s not so bad? But ya, I can imagine how frustrating it’d get if quality all around was just not there!

        • http://www.sateless-suitcase.com/ Julika

          A very interesting post, Alex! I agree that technology and driving are a lot cheaper in the States – I know a lot of people who would always buy their newest Apple gadgets in the States. Regarding groceries and toiletries Germany is way more affordable though. Fast food and eating out might be cheaper in the US, but organic groceries and milk products are definitely cheaper in Germany. My aunt lives in San Antonio, and she always complains how expensive proper good cheese is. In the end, I think it really depends where in the country you live. From what I remember, going out in Karlsruhe for example was more expensive than in my rural hometown.

          • http://ifsandsandbutts.com ifs ands & butts

            Ya true, cheese is a big one. It definitely depends on where you live but the variety in the US just makes finding deals so much easier too .You have the massive discount stores where you can get everything in one place, or buy in bulk like at Costco, and it really makes a big difference and is way more common in the US.

    • http://ifsandsandbutts.com ifs ands & butts

      ha, glad I could help!!

  • http://tinaingermany.blogspot.com TinainGermany

    thanks for turning my suspicions into a legit blog post! Hope your Christmas was fabulous!

  • marshall clark

    Hello,

    I live in Erding Germany, near the Munich Airport. I just returned from visiting my family in Santa rosa, Ca. (Bay Area). I was astonished how expensive it was to live there. Food was 2-3 times more expensive than we pay. And, none of the food in Bavaria is GMO nor is Fructose Corn Sirup allowed in any product. I also found the cost of Automobiles in the states quite a bit more expensive than in Germany. Gas is about the same because of mileage differences. I get close to 55 miles per gallon on my VW TDI 1.9 vs 29 Mpg with my daughters toyota coriola. Gas is double in Germany, but millage is double also. I can eat a nice full lunch in Erding for 6,90 Euros. The same in the use would cost about 14.00 USD. Health care and Prescriptions cost almost nothing in Germany and the gas station rest rooms are cleaner than the ones in the Hospital in Santa Rosa. Close are better and cheeper in the US, and there is more live entertainment. Phones are cheeper. I guess I don’t agree with your numbers. But, Bavaria is not like the rest of Germany

    • http://ifsandsandbutts.com ifs ands & butts

      Hi Marshall,

      As I stated in the post, I could only make a comparison between Texas and Karlsruhe. Texas is much cheaper than California along all lines: gas, food, rent, home ownership, etc.

      For your comparison, the website says that the cost of living is about the same: http://www.expatistan.com/cost-of-living/comparison/oakland-california/munich?

      You must also take into the account that this is written from the expat point of view. This requires factoring in the standard of living expected in the US and what it costs to get in Germany. A modern flat with full appliances in Germany just costs more, period. Yes, health care is provided, but at a higher cost, as I stated.

      Also, there’s no way you can compare a $14.00 meal in the US with a €6.90 one in Europe, they just aren’t the same variety. There are just as good lunch deals in the US for $7 that there are for €7. And let’s not forget to account to dollar versus the Euro.

      But yes, California is a more expensive option when comparing costs to the US or Germany. Eliminating Chicago and NYC though, the US is generally cheaper to live, in my opinion.

    • Ian

      Hi Marshall,
      My wife and I just returned from a visit to Germany after a 17 year absence. Although, we found things have changed in Germany (solar farms everywhere and a proliferation of roundabouts), we were glad to see many things had not. We are seriously considering retiring to Amberg/Opf where we used to live. Seeing our old friends again and other factors reignited the homesickness and I’m running the numbers to determine whether we will be able to manage it on our retirement income (ca. EUR 42,000 p.a.) This site and other “cost of living” sites aren’t very helpful as they compare only large cities which leaves an uncomfortable gap when trying to adapt their data to smaller towns. Erding and Amberg are roughly the same size, do you think a couple of empty nesters could get by on that level of income in a town of Erdings size? I promise not to hold you responsible for any undesireable out comes.

      • marshall clark

        Hello,

        What a surprise. I did not expect a reply! In short, yes.

        42K p.a. should be enough to live in the Erding area comfortably. I am not sure if the Amberg you refer to is the one near Nuremberg, or Landshut. We live in Fraunberg which is 12 km from Erding and 16 km from Landshut.

        Our cost of living is probably a little different because we cashed in all our investments and build a house with a rental unit. We have a very small construction loan which we pay monthly at 2.7% p.a. interest. Almost nothing.

        I will use my wife’s aunt and uncle who are retired and live close to us as a cost example. For the record I am 70 and my wife is pushing 50.

        Most families in Germany rent for long term, only 25% own houses. Renting is very common. I would not recommend building a house her. very stressful.I have more grey hair now!

        If you to were to rent a nice flat with a garden about 10 km from erding, you would pay about 500 per month cold. meaning without water, sewage, garbage, etc. At another 125 on top of that. Your utilities should cost you about 100 per month unless you live in an old building. So housing figure about 725 per mo for all. You will probably have to buy your own kitchen. That would cost about 2-3k euros.

        My wife and I eat reasonably well and our weekly grocery bill is about 60- 70. We always shop at Aldi, a small market and high quality bio food locally grown. We get raw milk from the dairy farm dawn the road, and likewise with eggs, and trout from the fish farm. We own our own car and gas is about 100 per month. We have a 2003 Skoda sedan TDI diesel. Gets nearly 55 miles per gallon. (4.8 Ltr/100 km)

        We lived in Prague for 16 years before moving to Germany with my wife who is Czech, so we pay health insurance in Czech Republic which one can use when in Germany without problem. We have dual residency because we go back and forth. I don’t know what in costs in Germany.

        Transport here is fantastic. I can walk out my door and take a 15 minute bus ride to the S-bahn or DB and get to Munich in an hour. Prague in 5 hours, Paris France is 6 hours on ICE direct from Munich.

        In a pinch, you could probably squeeze by on 30K per year, But that is living very sparsely. I should mention the largest health spa in Europe is here in Erding. Therme-Erding. Great for your joints! Great health care. The Erding area is a very special place in Germany only 3 % unemployment. Mixture of industry and Agricultural. No robberies. No homeless, No murders, Very Very clean. Primarily Bavarians are in are area. Harmonious place.

        Note, you may need to pay taxes on your pension. Even though I take money from my BOA account in the states, we got a tax bill. Probably because my wife took a part time job and took the marriage deduct.. Taxing pensions is the latest desperation in Europe. Big corporations don’t pay any taxes, but the retired now are expected to pay taxes on pensions. Its about 20%. But if no-one is working and you don’t have a tax id, I don’t think it will be a problem with you.

        Hope this helps. Let me know if you need anymore info, or come to the area.

        Best Regards,

        Marshall

        PS: I don’t know if this reply will be posted to the web or not, so i did not leave my email.

        • Matt

          Very helpful! I currently live in Houston (inside the loop – Midtown to be specific) and will be moving to Germany (specifically Hannover) in a month. Looks like Hannover is still more expensive than Houston – but not by much. Too bad my salary will be cut in half after the exchange rate/taxes :- Oh well.

          • http://ifsandsandbutts.com ifs ands & butts

            Well consider the factors like IF you don’t have a car, takes off a big expense and hopefully your job includes some killer health insurance (most full-time jobs in Germany do). Your accommodations may also be a little older than what you’re used to in midtown, but all part of the experience. Exciting!

  • michael schojer

    I am from Germany and live in Colorado since 91. I have to disagree. Food is much cheaper. Fine restaurant 110 euro for 7 people. You can’t beat that. Income is much higher for regular workers and taxes are similar to the US. One have to understand that Germans include in the tax health insurance and unemployment plus retirement. If you were to include this in the US you would have also 40% taxes. Also the food is of much higher quality as in the Staates. Food poisoning in the US is at 35% as it is in most european countries at 5%. No paid vacations for americans, no chrismas bonus, no paid holidays, only for higher rated professions.

  • Rod

    Anyone saying groceries in the US is more expensive than Germany is flat out wrong. I lived in the U.S. all my life until 4 years ago (live in Bavaria), and I can tell you its way more expensive for most things out here. Granted, Bavaria has a higher cost of living than northern Germany does.

    In my experience, produce in Germany is way more expensive than the U.S., as a number of things you only get decent prices when its seasonal. Otherwise, expect to pay a huge premium for sub-quality produce.
    Meat is WAY more expensive in Germany, and don’t get me started on seafood!
    You will, however, often pay less for beverages (alcoholic or non-alcoholic), baked goods, and dairy products. But meats and produce, there is no comparison.

    • http://speaking-denglish.com/ Alex, Denglish Speaker

      Thank you for your comment – I appreciate everyone’s insight! I do agree that meat, particularly seafood, is just outrageously priced in Germany. I always look forward to a good steak and some fresh gulf shrimp on my trips home.

  • Marschall Clark

    your are forgetting one important fact. All food in Bavaria is non-gmo. All beverages are not allowed to use fructose corn syrup for sweetener. no compare the prices. My FDA additives are not allowed in food sold in Germany and is far healthier.

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  • http://le-grand-monde.blogspot.com Niken

    and German tax is crazily high. but you get a good health insurance out of it

  • http://ifsandsandbutts.com ifs ands & butts

    This is very true, but coming from the US and me (personally) having good insurance and health care there, I don’t think I appreciate it enough.