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Is being an expat financially worth it?

Singapore was recently named the world’s most expensive city for the third consecutive year* leading many expats to wonder if living in the little red dot is doing their bank balance any favours. Taking into account the outlay of international school fees, the cost to lease or own a car and high rental costs (combined with the downturn of expat packages) it can often be hard for expats to get ahead financially.

Andrew Talbot from Expat Financial Planning, a division of Global Eye, breaks down the numbers to see how living in Singapore really affects your savings and if you’d be better off financially if you relocated, or returned to your home country. “For non-American expatriates Singapore’s low taxation rates and relatively high salaries can be a draw that balances out any increase in cost of living,” says Talbot. “But let’s take a quick look at some averaged expat cost of living numbers around the world, assuming a family of four (two adults with two school-aged children) as a comparison.”

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Make sure you do your research! Is it really financially worthwhile moving home?

Singapore

Average combined family wage: S$300,000
Estimated taxation: $38,000
Tax rate: 12.6%
Tuition: $50,000 ($25,000 per child)
Housing (monthly): $5,973
Shopping basket (monthly): $406.90

REMAINDER (annually):  $135,442

Sydney

Average wage: AU$280,000
Estimated taxation: $123,000
Tax rate: 41%
Private tuition: $40,000 ($20,000 per child)
Public tuition: $0.00
Housing (monthly): $4,657
Shopping basket (monthly): $390.92

REMAINDER (annually): $56,425 (private education)
REMAINDER (annually):  $96,425 (public education)

London  

Average wage: £168,000
Estimated taxation: £60,480
Tax rate: 39%
Private tuition: £28,000 (£14,000 per child)
Public tuition: £0.00
Housing: £3,172
Shopping basket (monthly): £197.15

REMAINDER (annually): £39,091 (private education)
REMAINDER (annually): £67,091 (public education)

New York

Average wage: US$210,000
Estimated taxation: $96,285
Tax rate: 45.85%
Private tuition: $30,000 ($15,000 per child)
Public tuition: 0.00
Housing: $5,826
Shopping basket: $434.38

REMAINDER (annually):  $8,591 (private education)
REMAINDER (annually):  $38,591 (public education)

 

Final thoughts

After crunching the numbers Singapore actually offers a good opportunity for expats to save their pennies. “As you can see, somewhat surprisingly, Singapore actually offers value for money in some categories,” says Talbot. “Naturally, cost of living is somewhat dependent on your lifestyle and financial choices; how many children you have, what school/s they attend, and whether you have chosen to own and operate a car, or use public transportation. While the draw to get back to ageing parents and family ties may be strong, make sure you get a full picture of any potential financial impact before planning a move.”

*Cost of Living survey conducted by The Economist Intelligence Unit 

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