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Regarding personal finance, Mexico City, Bangkok, and Valencia are the clear favorites. In Vancouver, London, and Paris, however, expats struggle with their living expenses.

Top Findings

• Expats in #1 Mexico City have the highest level of financial satisfaction.
• Incomes go a lot further in #2 Bangkok, so a comfortable life is easier to afford.
• #3 Valencia’s result is boosted by its top ranking for cost of living.
• Most top 10 cities are located in either Europe or Southeast Asia.
• Western and Central Europe, plus North America, dominate the bottom 10.

The Top 10

Methodology

The Personal Finance Index of the Expat City Ranking features 50 cities across the globe, with a minimum sample size of 50 respondents each. The index is based on three rating factors: general cost of living, expats’ satisfaction with their financial situation, and whether a respondent’s disposable household income is considered enough for a comfortable life.

#1 Mexico City: A High Level of Financial Satisfaction

Mexico City lands in first place of the Personal Finance Index. It also comes first for two of the three rating factors: expats’ satisfaction with their financial situation and whether their household income enables them to lead a comfortable life abroad.

Among the respondents in Mexico City, nearly three in four (73%) rate their financial situation positively, compared to 60% worldwide. Another 87% state that their disposable household income is enough or more than enough for a comfortable life (vs. 72% globally). In fact, about two in three expats (65%) even say that it is more than enough, 20 percentage points above the global average of 45%.

The latter result may be connected to the local cost of living. Though Mexico City ranks “only” 6th out of 50 destinations for this factor, another 67% judge their living expenses favorably, as opposed to 45% worldwide. With regard to income, expats in Mexico City don’t seem to be doing too badly either. The largest income group, with nearly one in four respondents (23%), has a yearly gross income of 50,000 to 75,000 USD (vs. 15% globally). Another 27% make at least 100,000 USD annually (vs. 21% globally).

#2 Bangkok: Paying Less for a Comfortable Life Abroad

Ranking 2nd out of 50 cities in the Personal Finance Index, Bangkok also comes in 2nd place for the cost of living: 69% of expats in the Thai capital are happy with this factor, nearly 25 percentage points more than the global average of 45%. “Your money definitely goes a lot further here than it would in Europe,” says a British-Nigerian expat.

The vast majority of respondents seems to agree: 86% say that their disposable household income is enough or more than enough to afford a comfortable life in Bangkok (vs. 72% globally). Nearly three in five (59%) even agree that it is more than enough, compared to 45% worldwide.

This high level of satisfaction with regard to income is probably not just due to the affordable cost of living. More than one in three expats in Bangkok (34%) have a yearly gross income of 100,000 USD or more, in comparison to about one in five (21%) globally. All in all, it is hardly surprising that more than seven in ten (72%) are happy with their financial situation (vs. 60% globally).

#3 Valencia: The Best City for Expats on a Budget

While Valencia ranks 3rd out of 50 cities in the Personal Finance Index, it is the uncontested number one for the cost of living: 83% of expats in Valencia are happy with this factor, 38 percentage points more than the worldwide average of 45%.

Though none of the respondents in Valencia mention financial considerations as their primary reason for moving there, they do benefit from the relatively low living expenses. Out of all the destinations featured in the Expat City Ranking, this Spanish city has the largest share of retirees — 26% of respondents, as opposed to a global average of 10%.

This might also explain the income structure in Valencia: 44% have a gross income of up to 25,000 USD a year, while only one in three worldwide (33%) belongs to this income group. This could be the reason why only 74% of expats in Valencia say that their income is enough or more than enough for a comfortable life, a noticeably lower share than in Mexico City (87%) or Bangkok (86%) and about the same as the global average of 72%.

Still, most respondents in Valencia are satisfied with their financial situation (67% happy vs. 60% globally). “You get a good quality of life for a very reasonable cost of living,” an expat from New Zealand sums it up. In fact, 23% state that a better quality of life was their actual motivation for relocating to Valencia.

The Bottom 3 Cities: Vancouver, London & Paris

Vancouver ends up at the bottom of the Personal Finance Index, ranking 50th out of 50 cities worldwide. Expats are particularly unhappy with the general cost of living: 69% rate it negatively, nearly twice the global average of 35%. “The cost of living is far too high. If you don’t have a very high income, you don’t have much money left after paying your bills,” a French expat laments. In fact, 50% say that their disposable household income is not enough for a comfortable life, compared to 28% globally.

Landing in 49th place, London hardly does any better. Here, too, seven in ten expats (70%) describe the cost of living as too high (vs. 35% globally). “It’s not just the weather that could be better,” says another respondent from France about life in London. “The cost of living and housing is getting worse with inflation.” This may be why 25% of expats are dissatisfied with their financial situation (vs. 21% globally).

In Paris (48th out of 50), “only” 62% of expats rate the cost of living negatively (vs. 35% globally). Another 35% each are unhappy with their financial situation in general (vs. 21% globally) or say that their disposable household income is not enough for a comfortable life (vs. 28% globally). “I think Paris is just a relatively expensive city to live in,” says an expat from Nigeria.

Trends in the Top 10

Except for Mexico City (1st), the top 10 destinations in the Personal Finance Index are all located in Europe or Asia. In addition to Bangkok (2nd), there is another Southeast Asian destination among the top 5, with Kuala Lumpur landing in fourth place. Valencia (3rd) is joined by two more destinations on the Iberian Peninsula — Lisbon (5th) and Madrid (10th). The other top-rated European cities are situated in Central Europe, though, with Prague ranking sixth, followed by Berlin (7th), Basel (8th), and Vienna (9th).

Although Mexico City is the destination that stands out most geographically speaking, a closer look at the index results reveals that Basel is actually the outlier among the top 10. Eight out of these destinations also rank in the global top 10 for cost of living as an individual factor; Prague (11th for this factor) misses the top 10 very narrowly. However, Basel only comes in a below-average 33rd place for cost of living.

So, while nine of the ten best-rated cities benefit from their relative affordability, Basel owes its great result mainly to the respondents’ high incomes. In fact, 73% of expats in Basel report an annual gross income of 100,000 USD or more (vs. 21% globally). Only in Mexico City (1st for this factor) are expats even more satisfied with their financial situation than in Basel (2nd).

Trends in the Bottom 10

Among the bottom 10 in the Personal Finance Index, a couple more geographical clusters emerge. With Vancouver (50th), Toronto (46th), and New York City (42nd), three of the ten worst-rated cities are located in North America. Another five destinations are spread across Western and Central Europe: London (49th) and Paris (48th) round out the bottom 3, with Dublin (44th), Geneva (43rd), and Frankfurt (41st) following not far behind.

Located in South Africa and Southern Europe, respectively, Johannesburg (47th) and Milan (45th) are not only the “odd cities out” in terms of geography. They are also the only ones among the bottom 10 in the Working Abroad Index, where Johannesburg ranks 49th and Milan 48th. It seems that economic issues might be a potential reason why expats in both cities are so dissatisfied with their personal finances — especially considering that these destinations do better than the rest of the bottom 10 with regard to living expenses. For this factor, Johannesburg lands in 19th place and Milan comes 32nd, whereas the other eight rank somewhere between 35th (Frankfurt) and 50th (Geneva).

Geneva is an outlier in another sense. Though it has the worst-rated living expenses worldwide, expats are still relatively satisfied with their financial situation (19th). Dublin is the only other bottom 10 city with a fairly similar profile. It comes in 14th place for financial situation but ranks 48th for cost of living. In these cases, it seems to be a cost-of-living crisis rather than economic concerns that are reflected in the Personal Finance Index.

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Image credit: InterNations

Filed under: Survey Data on November 29th, 2022