The cost of living in Germany as an expat
Moving to any new country requires much forethought and financial planning. Germany strikes a good balance between living standards and living costs. However, ex-pats must familiarize themselves with the finer points of financial planning beforehand. Here is a breakdown of the costs of living in Germany and how to manage them.
There is a common misconception that living in Germany is very expensive. This is simply not the case. Germany is cheaper than many other EU nations. A 2019 Eurostat survey revealed that living in Germany is cheaper than living in Italy, Denmark, Norway, France, Netherlands, or the UK. This may be surprising considering the large influx of migrants into Germany over the past decade.
The German Federal Office for Migration and Refugees reported in 2019 that the number of refugees living in private accommodations increased from 54% in 2016 to 75% in 2018. Rental prices during this period increased by merely 21%. The average monthly living expenses in Germany range from EUR 1,200 to EUR 3,000, depending on location and lifestyle. Most ex-pats in Germany enjoy substantially higher earnings than similar jobs in their home countries. They send significant remittances back to their families via trusted channels like the Ria Money Transfer App. Germany accommodates the affluent, as well those on a tight budget.
Housing rents in Germany vary a lot with the city. Despite being the national capital, rents in Berlin are some of the cheapest in Germany. Munich, on the other hand, is considered among the most expensive cities. Renting a 1-bedroom flat in Berlin can cost EUR 600 per month. The same in Munich would cost upwards of EUR 1,000. By comparison, rents in Frankfurt, Hamburg, and Cologne hover near EUR 900. On the opposite end of the chart are cities like Leipzig, Bochum, and Kiel. A 1-bedroom apartment in one of these cities can be had for as low as EUR 400 monthly. Rents of mid-sized apartments follow a similar trend. Renting a 120 sqm apartment costs EUR 1,500 on average in Berlin, EUR 1,700 in Frankfurt, and EUR 2,250 in Munich.
Utility costs in Germany are comparatively lower owing to the mandatory use of energy-efficient appliances. The average monthly utility bills for a mid-sized apartment would range between EUR 200-300. These include electricity, water, gas, and waste disposal. Utility services among major cities are the cheapest in Cologne at EUR 200 per month. Berlin (EUR 245) and Hamburg (EUR 240) are roughly the same. As a general rule, utility costs in Germany can be estimated at EUR 2.5 per sqm. An internet connection would cost an additional EUR 30-50 per month, depending on the plan.
Germany has an efficient public transportation system. It is safe, reliable, and versatile, with trains, buses, light rail, streetcars, and taxis. Best of all, it’s not that expensive. A one-way ticket for a bus or tram ride costs EUR 2-3 and is valid for 1.5 hours. A day ticket costs EUR 6-8 and is valid for an entire day. Taxi fares start at EUR 3.5 with about EUR 2 for every additional kilometer. Those who travel by train frequently should purchase a monthly train ticket called BahnCard. It starts at EUR 60 and can cost as high as EUR 7,400 depending on the type of card and class.
Food and groceries
Germany has a thriving agricultural sector. The prices of staple foods are quite low. The cost of daily necessities is more or less the same throughout the country. A 1L carton of milk costs EUR 1, while a dozen eggs cost EUR 2.20. One can get a pint of beer at EUR 1.20 and a bottle of good wine at EUR 5. Set aside EUR 40 per week per person for groceries. Dining out depends on the choice of restaurant and location. A decent meal in a budget restaurant costs about EUR 25 per person.
Education and childcare
Germany offers free public education of high quality. This benefit is extended to ex-pat children as well. The only requirement is to have valid residence permits. Private schooling is available but expensive at about EUR 20,000 per year. The childcare system in Germany is quite affordable. State-run childcare centers cost an average of EUR 300 per month per child. Childcare is further subsidized based on income. The cost of subsidized childcare can be as low as EUR 120 per month per child.
The German healthcare system requires ex-pats to purchase health insurance. Expats must contribute between 14% and 16% of their monthly salaries. For those employed by German firms, this cost is evenly split between employers and employees. Expats earning more than EUR 62,550 per year can also opt for private insurance. It starts at EUR 100 per month and can go as high as EUR 400 depending upon age, cover, and the type of plan.
Hemant G is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.