Why Is Everything So Cheap In Portugal? A Cost Guide

Portugal is not only a beautiful country but is also shockingly reasonable to live in. Almost anything you can name is cheaper and affordable in Portugal, from housing to food, healthcare to travel. That is why you might wonder, why is everything so cheap in Portugal?

Everything is cheaper in Portugal because the average household income is 30%-50% lower than in other European countries and the United States. This means that accommodation, transport, and food are all reasonably priced for tourists and residents alike. 

Since residents of Portugal don’t have the same spending capacity as an average European, they get to enjoy basic commodities at a much more affordable rate. However, this makes us curious about how low the basic necessities cost in Portugal. Let’s find out!

Cost Of Basic Necessities In Portugal

The biggest reason why Portugal is so cheap to travel around and live in is that the average Portuguese salary is much lower than in other countries. According to the National Statistics Bureau (INE), in 2020, Portugal’s average gross monthly salary was 1,314 euros, which comes to 18,396 euros per year – the sixth lowest average gross yearly salary among OECD states. But that doesn’t mean Portuguese live a poor life. Most Portuguese live a very happy and healthy life due to their lifestyle, positive mindset, and living environment, which is often much better than the average American.

You Can Live In Portugal For $1000 A Month, And This is How!

To get a better idea, let’s break down the cost of basic necessities in Portugal and compare it to other European countries to see how much cheaper Portugal is:

Living And Accommodation

Despite the average salary in Portugal being half that of a normal European, Portugal doesn’t boast a poor quality of life for its residents. Rather, Portugal’s living conditions are pretty decent compared to other European countries. 

There is a considerable difference in the prices of rent and leases between Portugal and eastern and western European countries. Here’s a table comparing Portugal’s apartment rent with USA’s average apartment rent:

Note: Any US costs mentioned in this article vary significantly depending on your state. The costs mentioned are the average expected costs and not the exact figures. 

Food And Groceries 

The cost of food and groceries in Portugal entirely depends on where you decide to buy your groceries from and where you decide to eat. However, food and groceries are generally reasonably priced for the average person in Portugal. The south of Portugal (the Algarve) is the most popular region of Portugal, so you can expect higher prices in this area compared to other regions of Portugal.

Groceries Expenses

Almost all grocery items fall into a reasonable price point, especially fresh produce like fruits, vegetables, meats, poultry, and dairy items. Plus, you’ll get them even cheaper if you avoid purchasing them from high-end markets or established brands. 

Following is a table highlighting the prices of the most basic grocery items in Portugal versus their price in the USA:

Eating Out Expenses 

Eating out is even cheaper if you are on a tight budget. Moreover, Portugal has many options to choose from when it comes to dining out. Cafes and restaurants throughout the country provide reasonably-priced breakfast, lunch, and dinner options. Below is a table for you to take a look at and catch up on the cost of fine dining in Portugal:

Travel And Transportation

Just like every other thing, travel and transport are just as inexpensive. Exploring nature, beaches, parks, museums, and other historical places of an enriching country like Portugal has been made reasonable so everyone would thoroughly enjoy the beauty of the country.

Public transportation has been made so affordable that all citizens can use it. Even though Portugal is cluttered with hills and has densely populated urban regions, the Portuguese transport system is well-built and connects all the cities. The country has various modes of public transportation, including suburban trains, buses, boats, and even a metro, to make things easier. 

With so many modes of transportation for the locals, Portugal’s roads are less populated with individual cars, and the transportation time is relatively lower too. With that said, here’s a table to give you a general idea of how much traveling costs in Portugal as compared to the US:

When compared to other European countries and the States, public transportation in Portugal is close to costing almost nothing.

Healthcare

While Portugal’s healthcare plan isn’t free by any means, the government-run healthcare still offers a variety of services for its residents. It comprises excellent social service professionals, such as dentists, psychologists, and nutritionists, who can be easily reached if your family doctor recommends it.

Moreover, all the medical assistance offered is pretty economical, especially when you compare their costs with other countries offering a similar quality of service. Plus, public healthcare is offered either completely free or at a very subsidized rate. Private Insurance can also be obtained for as little as $50 per month, depending on your age and health condition.

Below is a table providing a comprehensive comparison between public and private healthcare in Portugal as compared to the US:

Utilities And Bills

Finally, the expense of utilities is also incredibly affordable and budget-friendly. On average, utilities like electricity, water services, gas, and garbage collection costs range from $120 to $150. Additionally, bills are issued after every two months, which makes the payments of these bills even more manageable. 

With that said, keep in mind that these prices are in no way, shape, or form set in stone and may vary depending on how much you use these utilities and how big or small your house or apartment is. We’ve listed a utility bill price comparison between Portugal and the USA below: 

Frequently Asked Questions (FAQs)

Here are a few commonly asked questions about why everything is cheap in Portugal:

Is the quality of life there bad if everything is cheap in Portugal?

Absolutely not. The quality of life provided to Portugal’s citizens is exceptionally good with its warm climate, stunning scenery and beaches, excellent ecology, rich culture, stable economy, and high-quality medicine and education.

On average, how much does it cost monthly to live in Portugal?

On average, it costs around $1000-$1200 to live in an affordable city or town in Portugal, and in an expensive city, the cost ranges from $1500-$2000.

How much money will I need for my trip to Portugal?

It would be best if you planned to spend around $100 per day on your vacation in Portugal, which is the calculated average daily cost. On average, former travelers have spent $30 on meals for one day and $20 on local transportation. 

Conclusion 

Portugal is one of the cheapest countries to live in. Due to the low wages, the average foreign person can easily afford everything from food, a place to live, utilities, healthcare, and more. Though everything in Portugal may be cheap, the country itself is exceptionally beautiful and provides its citizens with a good quality of life. We hope our guide helped you clear any questions or doubts you may have had about what the cost of everything is and why it’s incredibly low!