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Money is often the first question on people’s minds when they hear that you are moving out of the country. How much are groceries? How much does it cost to eat out? I have seen a few videos showing couples and families going shopping and tallying up their bills and showing what they got. Those seem to be popular vlogs. I know that I enjoy them.

Here’s what I’ve found in my own person shopping experiences. Compared to the Pacific Northwest, almost everything is cheaper in Portugal other than gasoline and automobiles. On average, prices seem to be about 30% less expensive than in the Portland area. Groceries seem to be the biggest savings where produce is often half of what it is in our local Safeway. Organic produce seems to be the norm there rather than an overpriced specialty item.

Here is a comparison shopping site that you will love:
Cost of Living Comparisons. You can type in your city and compare it with almost any major city in the world. I think you will have fun with that.

Don’t Get Ripped Off at the ATMs!
Euronet vs Multibanco

Euronet ATM machines are everywhere. Avoid them like the plague. Those machines are a ripoff if you are trying to get Euros from your US debit or credit card. They may be better if you are withdrawing from a European bank but as an American traveling around Portugal, you won’t be happy with the fees and exchange rate.

The same is not true from the Multibanco ATMs. I was quite relieved to discover that there was a reasonable alternative ATM. Fees are nominal and the exchange rate is accurate. While Euronet is more prevalent than than Multibanco, you can find Multibanco in front of many banks. Be sure to look for them!

How Much is Housing in Portugal?

Whether renting or buying, prices have a wide range throughout Portugal. Renting in Portugal is not always easy. Landlords get top dollar by renting their properties through Airbnb during the high season. Therefore, it is not in their best interest to lease long-term. Many people who move to Portugal want to buy their own piece of paradise. Granted, not everyone is in a position to do that. But if you are, prices have been rising steadily over the last couple of years and it would be advantageous to buy property.

Getting a Mortgage in Portugal

There is one handicap for older people getting a mortgage in Portugal. Most banks won’t amortize a loan past the age of 75. I did find Caixa Geral De Depositos, a bank who will amortize up until the age of 80. However, if you are in your sixties, they may require you to get a life insurance policy. The equity in your property is generally not sufficient enough to satisfy the banks as it is in the US. If you have a small enough loan to value, you might be able to get the life insurance provision waived. The good news is that interest rates in Portugal carry an interest rate of about half of what you will find in the USA, often less than 2%!

The price of real estate varies greatly in Portugal. For example, a place in Ericeira, where my wife and I have decided to live, could cost you double of what you might find in Obidos, less than an hour’s drive north of Ericeira. And if you drive less than hour south of Ericeira, you will end up paying more for real estate in Sintra, Cascais or Lisbon. And the same goes for rentals.

Portugal is about the same size and population of Pennsylvania, so if price is a factor (which it is for most of us) you don’t have that far to drive to find something that you might be able to afford yet still be close enough drive to beautiful beaches, good restaurants and historic cultural sites. And the roads in Portugal are among the best in the world which makes it easier to get to anywhere you need to go.

Moving Money from Dollars to Euros

When you change money from the dollar to the Euro you can lose a lot of money. Just like the Euronet ATMs that I mentioned earlier, major banks will rip you off in the exchange! I use Transferwise and have saved thousands of dollars. If you are sending money up to $15,000 you can do it straight from your computer. Higher than that and you have to go to your bank and wire it to a Transferwise location in the US. You will pay a wire fee from your bank, typically around $30. You can choose to transfer into your Transferwise account either in the dollar or the Euro.

Transferwise charges you a nominal fee and uses the up to the moment accurate exchange rate. Most US banks will rip you off with both fees and exchange rate. If you’re not happy with the current exchange rate, you can keep it in dollars and exchange it to Euro at a moment’s notice when the rate is favorable. Unfortunately, there is no crystal ball to know which way it is going.

Every Percentage Point is Significant

Unfortunately, there is not exact science to predicting the ups and downs of the exchange rate. Recently I had to move a large sum of money for a down payment on the apartment we are buying in Ericeira. Every tick in the exchange rate is significant. Right now, the exchange rate is 1€ to $1.12. If you are transferring $100,000 you would get 89,289€. But if it’s 1.11 you’d get 90,090€ and at 1.13 you’d get 88,499€.

A swing between 1.11 and 1.13 is 1,591€ on a $100,000 transaction. So, you can imagine what kind of havoc a major swing would cause. The history of the Euro has ranged from .84 in 2000 during the European recession to a whopping 1.60 in 2008 during the US financial meltdown!

Aside from large purchases, say that you are living on a fixed retirement income for the USA. How can you budget for swings in the exchange rate? That can be hard to do. You can keep money in dollars in your Transferwise account and wait for the right moment. There are online sites that predict trends but nobody has a crystal ball.

Fluctuations in the exchange rate are a fly in the ointment for expats living on a fixed income. Ideally, you will have enough of a cushion to wait for favorable rates and hopefully there will be no wild swings.

Selling our House

In about a week my wife and I will put our house on the market. It’s a beautiful house with an incredible view of Mt. Hood. Naturally, it is with mixed emotions that we make this move. But our apartment being built in Ericeira will have a beautiful ocean view. Not only are we dealing with exchanging dollars to Euros but we will be exchanging our sunrise view over the mountain for a sunset view over the ocean.