17: Would I be financially better off living in the US or Europe?

When I was thinking about moving abroad, I remember a few people telling me that my salary would be lower if I moved to London. And you know what? I didn’t care. I wanted to move to London so badly, I didn’t mind. And for a couple years, I don’t think it does actually matter that much. But if we’re thinking longer term, I think it’s important to evaluate whether we would be financially better off living in Europe versus the US. And take time to weigh out how big of a difference our financial situations would be and how important to us this change would be for us. So, let’s take some time digging into it.

We’ll first look at some different factors that could contribute to your financial situation in Europe versus the US. And then, we’ll do a side-by-side comparison of 5 US cities and 5 European cities, comparing income with the cost of living in those cities to see where we would be able to live the most financially comfortable.

Here are some key points to consider when evaluating the financial aspects of living in the US or Europe: 

Cost of Living

The cost of living can vary significantly between different US states and European countries. Generally, major cities in Europe, such as London, Paris, and Zurich, tend to be more expensive than many US cities. However, there are also more affordable options in Europe, specifically in Eastern and Southern European countries. The salaries might be a bit lower, but if you’re self-employed earning money from US customers for example, then you’d definitely be making a lot more then the cost of living in these countries.

Salary and Employment Opportunities

Salaries can vary based on your profession and industry. In the US, certain sectors may offer higher pay compared to Europe, but this can also depend on the country and specific job market.

Taxes

Tax rates differ across both the US and Europe. Some European countries have higher income tax rates, but they may also offer more extensive social welfare programs, such as healthcare and education.

Healthcare

In Europe, access to healthcare is often provided by the government through public systems. This is a big advantage for those who prefer not to rely on private insurance or face high medical expenses. And I’m not going to lie to you. It’s so nice knowing I’m not going to be thrown a massive medical bill I’ll have to pay. In the US, healthcare costs can be substantial, and access to healthcare may depend on your employment status and insurance coverage.

Education

If you have children, education costs and quality of schools may be a significant factor. Some European countries offer free or low-cost higher education, whereas in the US, college tuition can be very expensive.

Currency Exchange Rates

Fluctuations in currency exchange rates can impact your financial situation if you earn income in one currency but have expenses in another. Or if you have investments in different countries for example, the fluctuations in currency rates might also impact your financial situation.

Retirement and Social Security

If you plan to retire in Europe, understanding how your US retirement accounts and Social Security benefits will be affected is crucial.

Visa and Immigration Requirements

Living in Europe may require navigating visa and immigration regulations, which can have associated costs and complexities.

In summary, whether you would be financially better off living in the US or Europe depends on your specific circumstances and priorities, 100%. Conduct thorough research, consider your personal and professional goals, and compare the cost of living, salary opportunities, and available benefits in both regions before making a decision. Consulting with financial advisors and expats who have experience living in your desired European country can also provide valuable insights.

Now, let’s do a little cost analysis of whether a single woman moving from the US would be financially better off moving to Europe or staying in the US.

One of the biggest cost differences between the US and Europe is that in the US most people have cars, which is a big monthly cost in the US.

I talk through all the details and costs in a lot more detail in the podcast episode 17: Would I be financially better off living in the US or Europe? Listen along to the podcast episode to hear more details.