Ask the Expat
Living and Traveling in Europe With the Weak Dollar
|Travelers and expats may take 2-wheel transportation to save money in Europe.
Europe remains among the most popular overseas destinations for Americans who wish to travel, study, work, and live. However, the continuing low exchange rate of the U.S. dollar against the Euro—even with the
recent relief--has had a serious impact on the budgets of Americans traveling or living in Europe. The dollar’s decline against the euro is not a recent phenomenon, but it has weakened so much in recent years that Europe is no longer
an easily affordable travel destination for most Americans. When I lived in Portugal in 2003, the dollar was still a little stronger than the euro. Compared to today’s exchange rate, my living expenses in Lisbon would be about forty percent
higher than they were only seven years ago.
Since the beginning of the worldwide recession in 2008, financial and exchange markets have been very volatile. Exchange rates can change fairly quickly in reaction to financial and economic news, which can significantly
impact your budget for your stay in Europe. At the same time, the growing U.S. budget deficit, negative trade balance, and sluggish economic recovery indicate that the U.S. dollar will likely not gain long-term parity against the euro any time
soon. Americans planning to spend an extended period of time in Europe should plan and budget for a lower exchange rate for quite some time to come, even given recent EU economic problems of their own.
Despite the high cost of traveling and living, Europe has not lost its appeal for North American travelers and expatriates. There are still millions of Americans who come to Europe every year to travel, study, and work.
Unfortunately, it is easy to exceed your travel budget in Europe, even by just indulging in the modest pleasures, such as eating out on occasion or visiting museums. To avoid unpleasant surprises, travelers need to figure out ways to stretch
their dollars while in Europe, which requires a bit of foresight and planning.
Traveling in Europe
Europe’s most famous tourist destinations are only the tip of the iceberg of what Europe has to offer. By shortening your visit to famous and expensive cities and by seeking out lesser-known and off the beaten track
travel destinations you can save a lot of money. Countries in Eastern and Southeastern Europe are still quite a bit cheaper than Central or Western Europe, and these destinations have their own unique culture and charm. Instead of visiting the
Mediterranean coast in France or Italy, why not spend time along the Adriatic Sea in Croatia or Montenegro, which are far more affordable?
Traveling off-season is another great way to save money. Once European children are back in school in early September, the tourist season winds down all across Europe. The weather in early fall is still warm and pleasant
enough to spend a lot of time outside and enjoy any outdoors activities you might be interested in. Traveling to Europe in spring or fall is not only cheaper in terms of airfares and accommodations, but there are fewer tourists, which offers
you a more authentic and enjoyable travel experience. Also, keep in mind that many cities offer public transportation passes that are cheaper than single tickets, and many museums all over Europe have reduced admissions on certain weekends and
Another way to cut cost is to stay away from credit cards. All major credit cards charge a fee for foreign currency transactions, anywhere from 1 to 3 percent of the purchase price, in addition to finance charges. It is much
cheaper to withdraw money from an ATM with your debit card. In most cases, you won’t pay any surcharges (check with your bank before leaving) and the exchange rate is better than exchanging cash or traveler’s checks. Another advantage
of debit cards is that you won’t be surprised by credit card bills after your return home, since you are paying for your trip as you go along.
Living and Working in Europe
European cities are great places to live in. They consistently rank among the cities with the highest standard of living and the highest quality of life anywhere in the world. In recent years Zurich, Vienna, Geneva, Düsseldorf,
and Munich have topped the worldwide rankings of the most livable cities. Unfortunately, they are also among the most expensive cities to live in. Unless you earn a high salary as an expatriate, have large amounts of retirement or investment
income, or have scholarships and grants as a student, living comfortably in one of Europe’s most attractive cities can be very difficult.
Finances are among the most important factors that impact expatriates’ lives in Europe. Planning your expenses for moving abroad and getting settled can make or break your extended stay in Europe. Determine what kind
of lifestyle you would like to have at your European destination, and then find out what you are actually able to afford depending upon your income and your finances.
Americans who are legally working in Europe don’t have to worry too much about the low dollar, since they are earning their salary in euros. Still, to make the best of your stay in Europe, it is important to plan your
finances well. Research housing and living costs before committing to a move, or you might have to deal with unpleasant surprises. Also keep in mind that depending upon your work arrangement you may still have to face other costs associated with
your move abroad. You may not only have to rent an apartment, but also make a security deposit and arrange for utilities and furnishings some time before you get your first paycheck. In many countries, work visas and residency cards do not come
cheap, and you should thoroughly research all the fees and costs of your move to Europe to find out if you can actually afford it.
To get an idea of cost of living and quality of life in the cities you are interested in, you might want to check out some of the quality of life and cost of living surveys conducted by large Human Resources firms, banks,
and other institutions. These surveys are usually conducted to cater to multinational companies with high-earning executives and professionals, but they are also useful for other expatriates as well. You just have to keep in mind that quality
of life in these surveys is largely determined by disposable income. If you have an executive position in Vienna you can no doubt enjoy the city’s rich cultural life, but if you are an English teacher at a local high school, you are more
likely to take the subway to a park on the weekend than go to the opera or dine at an upscale restaurant.
Advice for Students
For North American students, studying in Europe has become a very expensive endeavor. There are numerous exchange programs between universities in the U.S. and Europe, but the cost of student exchanges varies a lot. To avoid
paying more than you expect, it is important to get all the details about the student exchange before signing on. If your university has an exchange agreement with a university in Europe, you usually just pay the tuition and student housing fees
at your home university. But there are many exchange programs that operate independently and charge a very high fee for student exchange programs in Europe. Private exchange programs charge the full fee of tuition and housing in Europe, which
increases with every devaluation of the dollar. Each country has its own laws about student work, but in many European countries foreign students are allowed to work part-time or during the summer, which can be very helpful to cover your daily
living expenses. Part-time work is a great way to avoid accumulating high debt while studying abroad, and if finances are an important consideration, you might want to make sure that you study in a European country where foreign students are
allowed to work part-time. If you are planning to study in Europe your best choice is a smaller city with a lower cost of living.
For More Information
Citimayors.com provides information about the Cost of Living Index conducted by ECA, an international HR firm: www.citymayors.com/statistics/expensive-cities-intro.html.
UBS, a Swiss bank and financial services company conducts a standardized Prices and Earnings Survey in 73 international cities every three years. The Prices and Earnings survey provides a comprehensive comparison
of prices (122 goods and services plus apartment rents), incomes, income taxes, working hours and vacation days for 14 different occupations. A ranking of relative purchasing power, and thus the living standard for each of the 73 cities in the
survey, is derived from this data. www.ubs.com/1/e/wealthmanagement/wealth_management_research/prices_earnings.html.
The Economist Intelligence Unit (EIU) Worldwide Cost of Living Survey
The EIU Worldwide Cost of Living allows you to compare cost of living indices in different cities, calculate equivalent salaries among cities and research city information. Full access to the data requires a subscription. eiu.enumerate.com/asp/wcol_WCOLHome.asp.
Mercer Human Resource Consulting:
Quality of Living Survey: www.mercer.com/qualityofliving
Cost of Living Survey: www.mercer.com/costofliving
Volker Poelzl is a regular contributor and columnist of Transitions Abroad. He has extensively traveled in Europe, mostly during off-season. Contact
him at email@example.com.