Editor’s Note: This story originally appeared on Live and Invest Overseas.
Today I’m sitting down with my friends Jeff and Joch, who have been living in northern Portugal since 2020. Their claim is simple but striking: Since moving from California, they’ve cut their monthly expenses by roughly 50%.
Considering the rising cost of living in the United States, that kind of reduction naturally raises a question: How exactly did they do it?
Leaving the Grind Life Behind
Before moving abroad, Jeff and Joch lived outside Sacramento in Elk Grove, California.
Jeff commuted roughly 37 miles to work each day—what should have been a short drive routinely stretched to an hour-plus in traffic.
“It was the gasoline, the mortgage, the food, the insurance, the car payments, the car insurance, the health insurance,” Joch recalls. “It just kept adding up.”
They describe their life at the time as comfortable—but expensive.
“We were living the grand life,” Joch says. “But at what cost to our budget and quality of life?”
Retirement forced them to look more closely at those numbers. When Joch looked ahead to retirement—due in 2019—and would only receive Social Security, their household income would drop significantly.
“We were getting by with my job,” Jeff says, “but that was it. We weren’t enjoying the lifestyle we had when both of us were working.”
One thing they were determined to avoid was dipping into their retirement savings.
“We really wanted to live on the income,” Joch says. “Not the principal.”
Fortunately, Portugal had been on their radar for decades.
“I first came to Portugal for work in 1979,” Joch says. “I fell in love with the country and the people and said I was going to retire here someday.”
As they began researching seriously, they realized that long-held dream might solve their financial concerns as well.
“In order to stay in California, we would have had to downsize drastically,” Joch says. “Jeff would have had to keep working for another 20 years—and what would I do to fill my days alone for 20 years?!”
Portugal suddenly seemed like the answer.
The Biggest Savings
While they expected Portugal to be cheaper, some of the biggest savings still surprised them.
“We started tracking everything,” Jeff says. “Every few weeks I’d check the numbers and think, ‘Wow—it’s really working.’”
Groceries
One of the first shocks was the cost of food.
“In the U.S., some friends recently told us they couldn’t get a bag of groceries for $50,” Jeff says. “Here, for 50 or 60 euros we can get five or six bags.”
Shopping at local markets can make the savings even greater, particularly for fresh produce.
Housing
Housing also played a major role.
“Our mortgage here is about half of what it was in California,” Joch says.
Even better, the timeline changed dramatically. In California they still had about 20 years left on their mortgage. In Portugal, they were able to secure a 9-year loan on much more favorable terms.
“We only have a couple of years left now,” Joch says. “It’ll be paid off by 2029.”
Property taxes are also significantly lower, both at point of purchase and in every year of ownership.
Health Care
Health care was another major expense for them in the United States.
“The cost of insurance back home was pretty obscene,” Jeff says.
In Portugal, their private health insurance costs roughly a quarter of what they used to pay.
Prescription medications are also much cheaper—in fact, this was one of the first areas in which they began to see huge savings after moving.
Utilities
Even utilities turned out to be manageable, despite Europe’s reputation for higher energy costs.
Their electric bill averages about 30 to 40 euros per month, while gas—used for heating and hot water—runs roughly 30 to 100 euros depending on the season.
Living near the coast helps…
“We don’t even have air conditioning,” Jeff says. “Here on the coast, we don’t need it. We just open the windows at night and let the ocean breeze cool the apartment.”
Where Costs Are Higher
Not everything in Portugal is cheaper than back home…
Electronics tend to cost significantly more in Europe.
“I’m very tempted to go back to the States when it’s time to replace my MacBook,” Jeff says.
Cars can also be expensive due to import taxes, and gasoline prices are higher than in the U.S.
However, transportation overall can still be cheaper because many people rely on public transit.
Jeff and Joch themselves spent their first three years in Portugal without a car.
“If you can live close to public transportation,” Jeff says, “you can save a lot.”
A Different Way of Spending
One of the biggest financial shifts wasn’t about prices—it was about habits.
“In the U.S., we had several credit cards,” Joch says. “If we overspent, sometimes we’d pay it off over a few months.”
Their Portuguese bank works differently.
“Whatever you spend this month comes out the following month,” he explains. “So it’s more like an American Express card.”
The result?
“We simply spend less,” he says.
Living on a fixed income has also encouraged them to plan ahead for bigger expenses.
Joch elaborates, “If we want to take a cruise—which we’ll be doing in just a few weeks, leaving from Venice and going all throughout the Greek islands—we just say, ‘OK, in two months we’ll have enough discretionary income for that.’”
A Better Quality of Life
Cutting their expenses hasn’t meant cutting their lifestyle.
In fact, they say the opposite is true.
“We travel more,” Joch says. “We eat out more.”
Recently they took a spontaneous trip to northern Portugal for a local festival—booking a hotel, renting a car, and exploring the region for a few days.
Experiences like that are far easier to fit into their budget now—even on a whim.
The biggest improvement, though, may be psychological.
“It’s much easier to budget here,” Jeff says. “Back in the States there were so many unknowns.”
Unexpected medical bills, home repairs, or car issues could quickly derail a budget.
“In Portugal,” he says, “those surprises are much more manageable.”
That peace of mind has made retirement far less stressful.
“There’s none of the anxiety of wondering if we can cover everything next month,” Joch says.
Today their monthly expenses typically run about 2,500 to 3,000 euros compared with $5,000 to $7,000 in California.
“A 3,000-euro month is a splurge month,” Joch laughs, “one in which we either travel, eat out more, or enjoy more local events and performances than we would on average.”
For them, the move has delivered exactly what they hoped for: a lifestyle that’s both richer—and far more affordable.
