Saturday, June 20, 2015

Cost of Living Comparison

I've been so fortunate to live in different cities. One thing people kept and still keep asking me is the cost of living and how it compares in different countries/cities.

Every time I try to formulate my naive "qualitative" response to such comparison questions, most people come up immediately with their own unfounded "uber-quantitative" analysis. 90% of the time bottled water price becomes the ultimate benchmark, which I find quite annoying.

With this post, once and for all I am trying to show how one can easily compare cost of living in different cities.

1) Expenses are taken from I did not use the complete list they provided; personalized it a little bit. I also estimated my monthly usage and with that calculated my monthly cost of living. My estimated expense list might or might not reflect the real-life scenario. It can be much lower/higher than the actual case. However, since this fictive list is kept consistent for all cities, it matters not much.

2) We also need to look at the income. I used KPMG (for income tax), Glassdoor and OECD. Istanbul salaries are estimate.

3) Finally what's left from salary:

Zurich (CHF)Boston (USD)Munich (EUR)London (GBP)Istanbul (TL)Singapore (SGD)Luxembourg (EUR)Stockholm (Kr)
Total Cost4,853.82 4,688.03 2,672.48 3,647.64 3,966.48 6,193.04 3,472.55 23,994.26
Left from Average Monthly Disposable Salary1,557.55 -1,078.48 -150.01 -1,740.56 -1,914.15 -2,012.17 -147.55 -761.13
Entry-LevelLeft from BCG Associate Salary 878.69 -619.99 287.02 -1,720.34 -716.48 -1,526.37 N/AN/A
Mid-LevelLeft from McKinsey Associate Salary 1,377.04 2,349.43 994.19 -29.87 96.02 3,973.63 N/A3,921.77

Take-home message
  • It's hard to save if you are in London. If you need to do so, find an apartment in the suburbs.
  • Do not dine out in Zurich and Stockholm. Drive to Munich if you are in Zurich. 
  • If you want to get social, live in Singapore. Meal for 2 and cinema tickets are cheap.
  • In Zurich, stay away from Chicken Breast (meat). Go vegan.
  • Cappucino is relatively expensive in Istanbul (ca. 20% of meal for 2). Tip: Drink tea.
  • Don't drink wine in Istanbul. It seems like coke is the best option as for the beverage.
  • Utility is so expensive in Munich and Istanbul: 17.2% and 14.4% of total monthly cost respectively. Turn down the heating and throw on an extra layer.
  • Don't feel proud if you managed to find a position at BCG Switzerland; average Swiss is still better off than you are.
  • Keep in mind: Price is what you pay, value is what you get. Maybe the chicken quality (ultra organic, bio, fairtrade and free-range poultry) or the restaurants are better in Zurich than anywhere else?!
  • Start your career in Zurich, then go either to Boston or Singapore for your mid-career. However employers are also aware of the last statement; you might need to put in long work hours.
  • Taxes eat up large chunk of your salary. Try to avoid them if possible. 
  • Tighten your belt.